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Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same debt-to-GDP ratio. This paper explains this stylized fact within a dynamic stochastic general equilibrium framework by...
Persistent link: https://www.econbiz.de/10011111033
This paper proposes a model to study how conditional lending and immediate liquidity provision affect incentives for fiscal adjustment in a country facing the risk of sovereign default. Conditional lending provides explicit incentives for fiscal adjustment but immediate liquidity provision is...
Persistent link: https://www.econbiz.de/10011109435
In focusing on the 24 month window prior to the onset of the crisis, the criteria for ranking the indicators presented in our related work does not distinguish between a signal given 12 months prior to the crisis and one given one month prior to the crisis. In what follows we examine this issue,...
Persistent link: https://www.econbiz.de/10008531924
Predicting the timing of currency and banking crises is likely to remain an elusive task for academics, financial market participants, and policymakers. Few foresaw the Asian crises and fewer still could have imagined their severity. However, recent events have highlighted the importance of...
Persistent link: https://www.econbiz.de/10008531929
We model a typical Asian-crisis-economy using dynamic general equilibrium tech-niques. Exchange rates obtain from nontrivial fiat-currencies demands. Sudden stops/bank-panics are possible, and key for evaluating the merits of alternative ex-change rate regimes. Strategic complementarities...
Persistent link: https://www.econbiz.de/10005037756
The aim of this paper is to examine whether or not financial liberalization has triggered banking crises in developing countries. We focus in particular on the role of capital inflows as their volatilities threat economic stability. In the empirical model, based on Panel Logit estimation, we use...
Persistent link: https://www.econbiz.de/10011109586
The Eurozone countries are still trying to find a way out to the crisis that has affected the European Monetary Union (EMU) since 2010. Sovereign debt crisis, difficulties in the banking system and large current account imbalances have characterized the crisis of the euro, while several...
Persistent link: https://www.econbiz.de/10011260100
International capital markets have grown to be a major force shaping today's world economy, presenting a range of opportunities and threats to developing countries. Capital market liberalization created large pools of much-needed capital that developing economies could access, but tapping these...
Persistent link: https://www.econbiz.de/10008516567
In May 2007, Kuwait unilaterally abandoned the dollar peg, adopted in 2003 as a first step towards the monetary integration of GCC countries, to return to the previous basket peg system. The decision was motivated by the need to limit the inflationary pressures resulting from prolonged...
Persistent link: https://www.econbiz.de/10008516570
GCC Countries are characterized by a high incidence of foreigners on both the overall population and the labour force as well as by deep inequalities in social and economic term. These features have influenced the labour market and fuelled mutual tensions and grievances between nationals and...
Persistent link: https://www.econbiz.de/10008493024