Showing 1 - 7 of 7
This paper establishes the existence of multiple equilibria in infinite-horizon open- economy models in which the value … of tradable and nontradable endowments serves as collateral. In this environment, the economy displays self …
Persistent link: https://www.econbiz.de/10012456411
three-sector open economy model and estimate key structural parameters country by country. We find that at the country level …
Persistent link: https://www.econbiz.de/10012457414
the economy more vulnerable to a financial crisis. We find that moral hazard effects are limited if bailouts are systemic … and broad-based. If bailouts are idiosyncratic and targeted, however, this makes the economy significantly more exposed to …
Persistent link: https://www.econbiz.de/10012460074
, a pegging economy might be better off with a closed than with an open capital account. Second, the welfare gain from …
Persistent link: https://www.econbiz.de/10012460437
An equilibrium model of financial crises driven by Irving Fisher's financial amplification mechanism features a pecuniary externality, because private agents do not internalize how the price of assets used for collateral respond to collective borrowing decisions, particularly when binding...
Persistent link: https://www.econbiz.de/10012462564
This paper proposes a theory of foreign reserves as macroprudential policy. We study an open economy model of financial … significantly reduces the exposure to financial crises. The theory is consistent with the joint dynamics of private and official …
Persistent link: https://www.econbiz.de/10012480180
This paper contributes to a literature that studies optimal capital control policy in open economy models with …
Persistent link: https://www.econbiz.de/10012456196