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A General Equilibrium Model of Sovereign Default and Business Cycles

Mendoza, Enrique G. - 2011

Emerging markets business cycle models treat default risk as part of an exogenous interest rate on working capital, while sovereign default models treat income fluctuations as an exogenous endowment process with ad-hoc default costs. We propose instead a general equilibrium model of both...

Persistent link: https://www.econbiz.de/10013123681

Lessons from the Debt-Deflation Theory of Sudden Stops

Mendoza, Enrique G. - 2010

This paper reports results for a class of dynamic, stochastic general equilibrium models with credit constraints that can account for some of the empirical regularities of the Sudden Stop phenomenon of recent emerging markets crises. In these models, credit constraints set in motion Irving...

Persistent link: https://www.econbiz.de/10012761770

Endogenous Sudden Stops in a Business Cycle Model with Collateral Constraints : A Fisherian Deflation of Tobin's Q

Mendoza, Enrique G. - 2007

The current account reversals, large recessions, and price collapses that define Sudden Stops contradict the predictions of a large class of models in which the current account is a vehicle for consumption smoothing and investment financing. This paper shows that the quantitative predictions of...

Persistent link: https://www.econbiz.de/10012778286

Credit, Prices, and Crashes : Business Cycles with a Sudden Stop

Mendoza, Enrique G. - 2001

The 1990s emerging-markets crises were characterized by sudden reversals in inflows of foreign capital followed by unusually large declines in current account deficits, private expenditures, production, and prices of nontradable goods relative to tradables. This paper shows that these Sudden...

Persistent link: https://www.econbiz.de/10012787676

Public Debt, Fiscal Solvency and Macroeconomic Uncertainty in Latin America : The Cases of Brazil, Colombia, Costa Rica, and Mexico

Mendoza, Enrique G.; Oviedo, Pedro Marcelo - 2021

Ratios of public debt as a share of GDP in Brazil, Colombia, and Mexico were 10 percentage points higher on average … scenario question the sustainability of current debt ratios in Brazil and Colombia, while those in Costa Rica and Mexico seem …

Persistent link: https://www.econbiz.de/10013218333

Real Exchange Rate Volatility and the Price of Nontradables in Sudden-Stop-Prone Economies

Mendoza, Enrique G. - 2021

, and the Sudden Stops that accompanied the collapse of Mexico's managed exchange rates, could result from an endogenous …

Persistent link: https://www.econbiz.de/10013223897

The Business Cycles of Balance-of-Payment Crises : a Revision of Mundellan Framework

Mendoza, Enrique G.; Uribe, Martín - 2021

In his seminal 1960 article Robert Mundell proposed a model of balance-of-payments crises in which confidence in the continuation of a currency peg depended on the observed holdings of central bank foreign reserves. We examine the implications of a reformulation of this view from the perspective...

Persistent link: https://www.econbiz.de/10013235602

On the Instability of Variance Decompositions of the Real Exchange Rate Across Exchange-Rate-Regimes : Evidence from Mexico and the United States

Mendoza, Enrique G. - 2021

Variance decompositions of the Mexico-United States real exchange rate are examined using monthly data on consumer … tradable goods and nominal exchange rates holds only in periods in which Mexico was not under a regime of exchange …-rate management. In periods in the sample in which Mexico had a managed exchange-rate regime, the variability of prices of non …

Persistent link: https://www.econbiz.de/10013237548

Devaluation Risk and the Syndrome of Exchange-Rate-Based Stabilizations

Mendoza, Enrique G.; Uribe, Martín - 2021

of a small open economy calibrated to Mexico's 1987-1994 stabilization plan. In the model a time-variant interest rate …

Persistent link: https://www.econbiz.de/10013244367

On the Benefits of Dollarization When Stabilization Policy is Not Credible and Financial Markets are Imperfect

Mendoza, Enrique G. - 2021

This paper examines two potential benefits that emerging economies may derive from dollarization. First, dollarization may eliminate distortions induced by the lack of credibility of monetary policy. Second, dollarization may weaken financial frictions that result in endogenous credit...

Persistent link: https://www.econbiz.de/10013227195