Showing 1 - 5 of 5
, especially those with fixed exchange rates. We propose a theory of reserve accumulation that can account for these facts. Using a …
Persistent link: https://www.econbiz.de/10013299203
We develop a quantitative equilibrium model of financial crises to assess the interaction between ex-post interventions in credit markets and the buildup of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the...
Persistent link: https://www.econbiz.de/10013096860
In this paper, we study the optimal design of financial safety nets under limited private credit. We ask when it is optimal to restrict ex ante the set of investors that can receive public liquidity support ex post. When the government can commit, the optimal safety net covers all investors....
Persistent link: https://www.econbiz.de/10012983670
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/10012863265
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/10013142089