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On the Role and Eects of IMF Seniority
Saravia, Diego - Econometric Society - 2004
The paper presents a three period model that studies the eects of IMF loans on borrowers’ and lenders’ welfare … highlighting the fact that the IMF has both de jure and de facto seniority rights over private creditors. It is shown that an IMF … IMF intervention always makes the borrower country better off. The eects on non-senior lenders depend on the size of the …
Persistent link: https://www.econbiz.de/10005699628
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Temporary Tariffs and Capital Market Restrictions
Jafarey, Saqib; Lahiri, Sajal - Econometric Society - 2004
We develop a two-period model with endogenous investment and credit flows. Credit is subject to quantitative restrictions. With an exogenous restriction, we analyze the welfare effects of temporary tariffs. We then consider three scenarios under which a monopoly lender optimally decides the...
Persistent link: https://www.econbiz.de/10005342183
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A Risk Management Approach to Emerging Market’s Sovereign Debt Sustainability with an application to Brazilian data
Rigobon, Roberto; Garcia, Marcio - Econometric Society - 2004
In this paper we study the question of debt sustainability from a risk management perspective. The debt accumulation equation for any country involves variables that are stochastic and closely intertwined. When these aspects are taken into consideration the notion of debt sustainability is...
Persistent link: https://www.econbiz.de/10005129802
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Debt Hold Up and International Lending
Ramcharan, Rodney - Econometric Society - 2004
Are lending contracts between international financial institutions (IFIs) and sovereign borrowers optimal? To address this question this paper builds on two ideas. First, the prospect of future debt relief can make it profitable for an IFI to continue lending even if lending contracts are...
Persistent link: https://www.econbiz.de/10005342272
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International financial rescues and debtor-country moral hazard
Taylor, Ashley; Gai, Prasanna - Econometric Society - 2004
rescue initiatives on IMF programme participation using a pooled probit model. The safety net permitting exceptional access …
Persistent link: https://www.econbiz.de/10005342308
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Good Housekeeping? Reputation, Fixed Exchange Rates, and the 'Original Sin' Problem
Tan, Kang Yong; Gai, Prasanna - Econometric Society - 2004
This paper examines how the choice of exchange rate regime can signal financial rectitude and, in so doing, influcence a country's ability to borrow internationally in domestic currency. We develop a model in which the constant probability of a 'type change' creates incentives for disciplined...
Persistent link: https://www.econbiz.de/10005086430
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A Theory of Fear of Floating
Bianchi, Javier; Coulibaly, Louphou - National Bureau of Economic Research - 2023
Many central banks whose exchange rate regimes are classified as flexible are reluctant to let the exchange rate fluctuate. This phenomenon is known as "fear of floating". We present a simple theory in which fear of floating emerges as an optimal policy outcome. The key feature of the model is...
Persistent link: https://www.econbiz.de/10013537789
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Sovereign Debt: Default, Market Sanction, and Bailout
Britto, Paulo Augusto P. de - Econometric Society - 2004
's economic policy. This essay provides a theoretical grounding for the IMF and other multilateral agencies intervention on the …
Persistent link: https://www.econbiz.de/10005129800
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The Invisible Hand in Emerging Markets
Chari, Anusha; Henry, Peter - Econometric Society - 2004
We present the first firm-level analysis of stock market liberalization on investment. In the year that an emerging economy liberalizes, the growth rate of its typical firm^Òs capital stock exceeds the pre-liberalization mean by 4.1 percentage points. In each of the next three years the average...
Persistent link: https://www.econbiz.de/10005129816
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Renegotiation, Collective Action Clauses and Sovereign Debt Markets
Wynne, José; Weinschelbaum, Federico - Econometric Society - 2004
environments with and without contingent debt and IMF presence. We claim that CACs are likely to be an irrelevant dimension of debt … contracts in current sovereign debt markets because of the variety of instruments utilized by sovereigns and the implicit IMF … guarantee. Nonetheless, under a new international bankruptcy regime like that recently proposed by the IMF, CACs can increase …
Persistent link: https://www.econbiz.de/10005170261