Intro -- Contents -- I. INTRODUCTION -- II. BACKGROUND -- III. THE MODEL -- A. Households -- B. Firms -- C. Government -- D. Domestic Financial Intermediary -- E. Foreign Creditor -- IV. EQUILIBRIUM CONDITIONS -- V. PARAMETERS -- VI. SIMULATIONS -- A. The Base Case -- B. Application of...

Intro -- Contents -- I. INTRODUCTION -- II. SUDDEN STOPS AND MULTILATERAL INSURANCE -- III. CAPITAL FLOWS AND SUDDEN STOPS -- IV. IMF-SUPPORTED PROGRAMS -- V. MULTIVARIATE ANALYSIS -- VI. IMF-SUPPORTED PROGRAMS AND SUDDEN STOPS -- VII. EXTENSIONS -- VIII. CONCLUSIONS AND IMPLICATIONS -- Appendix...

This paper studies the effects of fiscal policy response in 118 episodes of systemic banking crisis in advanced and emerging market countries during 1980-2008. It finds that timely countercyclical fiscal measures contribute to shortening the length of crisis episodes by stimulating aggregate...