The paper analyses and compares the role that the tightening in liquidity conditions and the collapse in risk appetite … played for the global transmission of the financial crisis. Dealing with identification and the large dimensionality of the … shocks have had a more severe impact on advanced economies, it was mainly the decline in risk appetite that affected emerging …

This paper takes the view that a major contributing factor to the financial crisis of 2008 was a failure to correctly … assess and price the risk of default. In order to analyse default risk in the macroeconomy, a simple general equilibrium … model with banks and financial intermediation is constructed in which default-risk can be priced. It is shown how the credit …

Capital flight associated with the onset of a financial crisis in a country is often accompanied by an inflow of … to investors with higher valuations once the crisis abates. …

We argue that emerging economies borrow short term due to the high risk premium charged by bondholders on long …-term debt. First, we present a model where the debt maturity structure is the outcome of a risk sharing problem between the … government and bondholders. By issuing long-term debt, the government lowers the probability of a rollover crisis, transferring …

the credit stock to recover to its pre-crisis level does not hamper growth, a failure of credit flows to recover slows …

leverage for the remainder, and an eventual financial and real crisis. The paper presents a theoretical model where these … features arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis can reduce leverage if …

unhedged borrowers. This measure explicitly takes into account the indirect exchange rate risk that banks undertake when they … lend to borrowers that will not be able to repay in the event of a sharp depreciation. Such systemic risk taking is not … building up in a number of emerging economies before the recent global crisis. Measuring currency mismatch more accurately can …