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Exchange Rate Regimes and Financial-Market Imperfections

Aizenman, Joshua - 2000

This paper investigates the design of an exchange rate policy for an economy where the domestic capital market is … characterized by nominal contracts. We show that the choice of an exchange rate regime is intertwined with the financial structure … the desirable exchange rate stability. This result follows from the observation that greater exchange rate stability is …

Persistent link: https://www.econbiz.de/10012471012

Determinants of Financial Stress and Recovery during the Great Recession

Aizenman, Joshua - 2010

In this paper, we explore the link between stress in the domestic financial sector and the capital flight faced by countries in the 2008-9 global crisis. Both the timing of emergence of internal financial stress in developing economies, and the size of the peak-trough declines in the stock price...

Persistent link: https://www.econbiz.de/10012462052

Financial Crisis and the Paradox of Under- and Over-Regulation

Aizenman, Joshua - 2009

This paper illustrates the paradox of prudential under-regulation in an economy that adopts financial reform, a reform which exposes the economy to future financial crises. There is individual-uncertainty about the crisis incidence, and the probability of the crisis is updated sequentially...

Persistent link: https://www.econbiz.de/10012463631

Capital Market Imperfections and the Theory of Optimum Currency Areas

Agenor, Pierre-Richard - 2008

This paper studies how capital market imperfections affect the welfare effects of forming a currency union. The analysis considers a bank-only world where intermediaries compete in Cournot fashion and monitoring and state verification are costly. The first part determines the credit market...

Persistent link: https://www.econbiz.de/10012464557

Sterilization, Monetary Policy, and Global Financial Integration

Aizenman, Joshua - 2008

This paper investigates the changing pattern and efficacy of sterilization within emerging market countries as they liberalize markets and integrate with the world economy. We estimate the marginal propensity to sterilize foreign asset accumulation associated with net balance of payments...

Persistent link: https://www.econbiz.de/10012464745

Expectations, Asset Prices, and Monetary Policy : The Role of Learning

Gilchrist, Simon - 2006

This paper studies the implications of financial market imperfections represented by a countercyclical external finance premium and the gradual recognition of changes in the drift of technology growth for the design of an interest rate rule. Asset price movements induced by changes in trend...

Persistent link: https://www.econbiz.de/10012466222

On the Hidden Links Between Financial and Trade Opening

Aizenman, Joshua - 2003

This paper investigates the association between commercial and financial openness of developing countries. The data suggest that, controlling for GDP/Capita changes and allowing for country specific effects, increase in a developing country's (exports + imports)/GDP is associated with a highly...

Persistent link: https://www.econbiz.de/10012468791

Endogenous Pricing to Market and Financing Costs

Aizenman, Joshua - 2000

volatility are high, few imports are pre-bought, the price of imports is determined by the realized real exchange rate, and a … is observed, and some imports are pre-bought. If the realized real exchange rate is favorable enough more imports are … purchased in the spot market, the price of imports is determined by the realized real exchange rate, and the relative PPP holds …

Persistent link: https://www.econbiz.de/10012470823

Capital Markets Integration, Volatility and Persistence

Aizenman, Joshua - 1995

This paper shows that volatility induces adverse first order welfare effects in countries excluded from the global capital market. This result is illustrated in a model characterized by gains from a greater division of activities, where shocks are persistent. We show that non-linearities...

Persistent link: https://www.econbiz.de/10012473636

External Debt, Planning Horizon and Distorted Credit Markets

Aizenman, Joshua - 1988

The purpose of this paper is to study the role of policies in the presence of country risk with overdiscounting by the policy maker. Overdiscounting may reflect political uncertainty, which makes the effective planning horizon of the centralized government shorter than that of the private...

Persistent link: https://www.econbiz.de/10012476402