Similar Search Results

A self-fulfilling model of Mexico's 1994-95 debt crisis

Cole, Harold L.; Kehoe, Timothy J. - Federal Reserve Bank of Minneapolis - 1996

This paper explores the extent to which the Mexican government's inability to roll over its debt during December 1994 and January 1995 can be modeled as a self-fulfilling debt crisis. In the model there is a crucial interval of debt for which the government, although it finds it optimal to repay...

Persistent link: https://www.econbiz.de/10005367672

The role of institutions in reputation models of sovereign debt

Cole, Harold L.; Kehoe, Patrick J. - Federal Reserve Bank of Minneapolis - 1994

A standard explanation for why sovereign governments repay their debts is that they must maintain a good reputation to …

Persistent link: https://www.econbiz.de/10005367682

Default, settlement, and signalling: lending resumption in a reputational model of sovereign debt

Cole, Harold L.; Dow, James; English, William B. - Federal Reserve Bank of Minneapolis - 1994

This paper develops a simple model of sovereign debt in which defaulting nations are excluded from capital markets and regain access by making partial repayments. This is consistent with the historical evidence that defaulting countries return to international loan markets soon after a...

Persistent link: https://www.econbiz.de/10005712336

On the denomination of government debt: a critique of the portfolio balance approach

Backus, David K.; Kehoe, Patrick J. - Federal Reserve Bank of Minneapolis - 1988

, regressions of exchange rates or interest differentials on variables measuring debt’s currency composition contain no information …

Persistent link: https://www.econbiz.de/10005498583

The international diversification puzzle is not as bad as you think

Heathcote, Jonathan; Perri, Fabrizio - Federal Reserve Bank of Minneapolis - 2007

In simple one-good international macro models, the presence of non-diversifiable labor income risk means that country … portfolios should be heavily biased toward foreign assets. The fact that the opposite pattern of diversification is observed … good hedge against non-diversifiable labor income risk. We then use our theory to link openness to trade to the level of …

Persistent link: https://www.econbiz.de/10005712359

Default and the maturity structure in sovereign bonds

Arellano, Cristina; Ramanarayanan, Ananth - Federal Reserve Bank of Minneapolis - 2008

This paper studies the maturity composition and the term structure of interest rate spreads of government debt in emerging markets. In the data, when interest rate spreads rise, debt maturity shortens and the spread on short-term bonds is higher than on long-term bonds. To account for this...

Persistent link: https://www.econbiz.de/10005498541

Sustainable plans and mutual default

Chari, V.V.; Kehoe, Patrick J. - Federal Reserve Bank of Minneapolis - 1989

This paper presents a simple general equilibrium model of optimal taxation in which both private agents and the government can default on their debt. As a benchmark we consider Ramsey equilibria in which the government can precommit to its policies at the beginning of time, but in which private...

Persistent link: https://www.econbiz.de/10005498565

International business cycles with endogenous incomplete markets

Kehoe, Patrick J.; Perri, Fabrizio - Federal Reserve Bank of Minneapolis - 2000

enforceable; any country can renege on its debts and suffer the consequences for future borrowing. To solve for equilibrium in …

Persistent link: https://www.econbiz.de/10005367767

Banking in computable general equilibrium economies

Diaz-Gimenez, Javier; Prescott, Edward C.; Fitzgerald, Terry - Federal Reserve Bank of Minneapolis - 1992

In this paper we develop a computable general equilibrium economy that models the banking sector explicitly. Banks intermediate between households and between the household sector and the government sector. Households borrow from banks to finance their purchases of houses and they lend to banks...

Persistent link: https://www.econbiz.de/10005367711

International banking: where do we go from here?

Auerbach, K. - Federal Reserve Bank of Minneapolis - 1975

Persistent link: https://www.econbiz.de/10005367751