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Liquidity, Institutional Quality and the Composition of International Equity Outflows

Goldstein, Itay - 2010

country. Based on a theoretical model, we predict that (1) source countries with higher probability of aggregate liquidity … 140 source countries from 1985 to 2004. Our key variable is the probability of an aggregate liquidity crisis, estimated … that the probability of a liquidity crisis has a strong effect on the composition of foreign equity investment. Furthermore …

Persistent link: https://www.econbiz.de/10012759578

Zombie Lending and Depressed Restructuring in Japan

Caballero, Ricardo J. - 2010

In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price collapse in the early 1990s. We start with the well-known observation that most large Japanese banks were only able to comply with capital standards because regulators were lax in...

Persistent link: https://www.econbiz.de/10012761673

Asset Liquidity and International Portfolio Choice

Geromichalos, Athanasios - 2011

over faster than domestic assets because the former have desirable liquidity properties, but represent inferior saving …

Persistent link: https://www.econbiz.de/10013121055

Bailouts, the Incentive to Manage Risk, and Financial Crises

Panageas, Stavros - 2010

A firm's termination leads to bankruptcy costs. This may create an incentive for outside stakeholders or the firm's debtholders to bail out the firm as bankruptcy looms. Because of this implicit guarantee, firm shareholders have an incentive to increase volatility in order to exploit the...

Persistent link: https://www.econbiz.de/10013152555

Fire Sales in a Model of Complexity

Caballero, Ricardo J. - 2009

Financial assets provide return and liquidity services to their holders. However, during severe financial crises many … asset prices plummet, destroying their liquidity provision function at the worst possible time. In this paper we present a … not control or understand. The liquidity of the market quickly vanishes and a financial crisis ensues. The model exhibits …

Persistent link: https://www.econbiz.de/10013155022

Liquidity, Institutional Quality and the Composition of International Equity Flows

Goldstein, Itay - 2010

liquidity shocks, the liquidation price they can get will be lower when buyers know that they have more information on … expectation of future liquidity problems export relatively more FPI than FDI, and (2) this effect strengthens as the source … source countries from 1985 to 2004. Our key variable is the predicted severity of liquidity shock, as proxied by episodes of …

Persistent link: https://www.econbiz.de/10013148094

Optimal Taxation in the Presence of Bailouts

Panageas, Stavros - 2010

The termination of a representative financial firm due to excessive leverage may lead to substantial bankruptcy costs. A government in the tradition of Ramsey (1927) may be inclined to provide transfers to the firm so as to prevent its liquidation and the associated deadweight costs. It is shown...

Persistent link: https://www.econbiz.de/10013150643

A Brazilian Debt-Crisis

Razin, Assaf; Sadka, Efraim - 2021

We develop a stylised model of multiple equilibria, with country risk spreads at the focus of the analysis. Fears that the country default on its debt triggers a reversal in the direction of inflows of international financial capital raise interest-rate spreads and thus the cost of servicing the...

Persistent link: https://www.econbiz.de/10013219683

A Dual Liquidity Model for Emerging Markets

Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021

emerging economy, and those affecting borrowing from foreign lenders. This 'dual liquidity' model offers a parsimonious …

Persistent link: https://www.econbiz.de/10013224671

A Quantitative Model of Sudden Stops and External Liquidity Management

Caballero, Ricardo J.; Panageas, Stavros - 2021

liquidity and liability management more generally …

Persistent link: https://www.econbiz.de/10013228758