This paper examines whether prudential policies help to reduce sovereign bond vulnerability to global spillover risk in ASEAN-4 countries (Indonesia, Malaysia, the Philippines, and Thailand). We measure sovereign vulnerability within a risk connectedness network among sovereign bonds. The direct...

The "monetary trilemma" - the hypothesis that full monetary policy autonomy, exchange rate stability, and financial openness cannot simultaneously be achieved - has long been studied. Recently, holding international reserves (IR) has become an important policy instrument, insuring against...

November 2000 - A two-step approach is used to assess the extent to which the credit crunch in East Asia was supply- or demand-driven. The results for Thailand suggest that the contraction in bank lending that accompanied the crisis was the result of supply factors. Agénor, Aizenman, and...

June 2000 - When households face the possibility of borrowing constraints in bad times, favorable movements in the permanent component of the terms of trade may lead to higher rates of private savings. Agénor and Aizenman examine the extent to which permanent terms-of-trade shocks have an...