Showing 1 - 10 of 33
This paper shows that systemic risk exerts a significant impact on the behavior of depositors, sometimes overshadowing their responses to standard bank fundamentals. Systemic risk can affect market discipline both regardless of and through bank fundamentals. First, worsening systemic conditions...
Persistent link: https://www.econbiz.de/10005328877
To understand the consequences of the presence of international safety nets on governments' incentives to undertake reforms, we model IFIs´ interventions as country insurance policies. We find that country insurance (especially when made contingent on negative external shocks) is more likely...
Persistent link: https://www.econbiz.de/10005328891
We show that very little is needed to create liquidity under-supply in equilibrium: only the presence of credit constraints on demand. We show that the under-supply is a non-monotone function of the demand distortion that causes it, a result that may have interesting implications for emerging...
Persistent link: https://www.econbiz.de/10005063557
In this paper we review the main features of the Chilean-Style of capital controls during the nineties. In particular, we analyze empirically the effectiveness of the unremunerated reserve requirement (URR) in three key areas: its capacity to open space for monetary policy, its influence on the...
Persistent link: https://www.econbiz.de/10005063567
The recent wave of financial crises has fueled the debate on the effect of IFIs intervention on governments' incentives to undertake reforms. In this paper we treat this intervention more generally as a country insurance contract, and examine its implications in a stylized set-up. More...
Persistent link: https://www.econbiz.de/10005063703
We analyze optimal ï¬scal,monetary and exchange rate policy in a simple small open econonomy model with price setting frictions.We perform our analysis in the tradition of optimal dynamic Ramsey problems.We characterize optimal allocations and the government policies that implement the optimal...
Persistent link: https://www.econbiz.de/10005699579
This paper analyzes a stochastic model of evolution in normal form games. The long-run behavior of individuals in this model is investigated in the limit where mutation rates tend to zero, while the expected number of mutations, and hence population sizes, tend to infinity. It is shown that...
Persistent link: https://www.econbiz.de/10005129796
When people share risk in financial markets, intermediaries provide costly enforcement for most trades and, hence, are an integral part of financial markets' organization. We assess the degree of risk sharing that can be achieved through financial markets when enforcement is based on the threat...
Persistent link: https://www.econbiz.de/10005129807
In some games, the impact of higher-order uncertainty is very large, implying that present economic theories may be misleading as these theories assume common knowledge of the type structure after specifying the first or the second orders of beliefs. Focusing on normal-form games in which the...
Persistent link: https://www.econbiz.de/10005129808
This paper studies the strategic value of delegation in dynamic interactions, where principals provide managers with intertemporal incentives in order to obtain a competitive advantage. While direct management offers intertemporal commitment opportunities, the separation of ownership from...
Persistent link: https://www.econbiz.de/10005342160