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Theoretical Notes on Bubbles and the Current Crisis

Martin, Alberto - 2010

We explore a view of the crisis as a shock to investor sentiment that led to the collapse of a bubble or pyramid scheme in financial markets. We embed this view in a standard model of the financial accelerator and explore its empirical and policy implications. In particular, we show how the...

Persistent link: https://www.econbiz.de/10012462257

Enforcement Problems and Secondary Markets

Broner, Fernando A. - 2007

There is a large and growing literature that studies the effects of weak enforcement institutions on economic performance. This literature has focused almost exclusively on primary markets, in which assets are issued and traded to improve the allocation of investment and consumption. The general...

Persistent link: https://www.econbiz.de/10012465088

Sovereign Debt Markets in Turbulent Times : Creditor Discrimination and Crowding-Out Effects

Broner, Fernando - 2013

In 2007, countries in the euro periphery were enjoying stable growth, low deficits, and low spreads. Then the financial crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and,...

Persistent link: https://www.econbiz.de/10012458985

Country Portfolios

Kraay, Aart - 2000

How do countries hold their financial wealth? We construct a new database of countries' claims on capital located at home and abroad, and international borrowing and lending, covering 68 countries from 1966 to 1997. We find that a small amount of capital flows from rich countries to poor...

Persistent link: https://www.econbiz.de/10012470955

The International Transmission of Credit Bubbles : Theory and Policy

Ventura, Jaume - 2015

We live in a new world economy characterized by financial globalization and historically low interest rates. This … in this world. The interest-rate and terms-of-trade spillovers produce policy externalities that make the noncooperative …

Persistent link: https://www.econbiz.de/10012457733

The World Income Distribution

Acemoglu, Daron - 2001

trade leads to a stable world income distribution. This is because specialization and trade introduce de facto diminishing … perspective time-series behavior of the world economy is similar to that of existing endogenous growth models, with the world … country level, the cross-sectional behavior of the world economy is similar to that of existing exogenous growth models: cross …

Persistent link: https://www.econbiz.de/10012470646

Managing Credit Bubbles

Martin, Alberto - 2014

The "equilibrium" bubble size depends on investor sentiment, however, and it typically does not coincide with the "optimal" bubble size. This provides a new rationale for macroprudential policy. A lender of last resort can replicate the "optimal" bubble by taxing credit when the "equilibrium"...

Persistent link: https://www.econbiz.de/10012458704