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Efficient Bailouts?
Bianchi, Javier - 2012
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/10012460074
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Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts
Farhi, Emmanuel - 2009
policy is non-targeted. The ex post benefits from a monetary bailout accrue in proportion to the number amount of leverage … bailout instruments is endogenous and characterize the structure of optimal bailouts …
Persistent link: https://www.econbiz.de/10012463512
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Macroprudential Regulation Versus Mopping Up After the Crash
Jeanne, Olivier - 2013
macroprudential tax revenue in a bailout fund used for stimulus measures is undesirable …
Persistent link: https://www.econbiz.de/10012459987
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The Case for Open-Market Purchases in a Liquidity Trap
Auerbach, Alan J. - 2003
Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. We show that even were this the case, there remains a...
Persistent link: https://www.econbiz.de/10012468884
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Optimal Bailouts and the Doom Loop with a Financial Network
Capponi, Agostino - 2020
optimal bailout policy in the presence of this "doom loop". Rescuing banks with high domestic sovereign exposure is optimal if … these banks are sufficiently central in the network, even though that requires larger bailout expenditures than rescuing low …
Persistent link: https://www.econbiz.de/10012481658
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Bailouts and the Preservation of Competition
Roberts, James W. - 2010
competitors as the firms leaving the market. We quantify these effects in the case of the 1984 bailout of timber companies that … faced substantial losses on existing federal timber contracts. We predict that the bailout substantially increased sale … prices in subsequent auctions because firms that might have might have been induced to enter without the bailout tended to …
Persistent link: https://www.econbiz.de/10012462006
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Uncertainty as Commitment
Nosal, Jaromir - 2013
Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate …
Persistent link: https://www.econbiz.de/10012459895
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Debt Fragility and Bailouts
Cooper, Russell - 2012
This paper studies debt fragility and the sharing of the resulting strategic uncertainty through ex post bailouts. Default arises in equilibrium because of both fundamental shocks and beliefs. The probability of default depends on borrowing rates and, in equilibrium, on the beliefs of lenders...
Persistent link: https://www.econbiz.de/10012460282
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Macroprudential Policies in Open Emerging Economies
Hahm, Joon-Ho - 2012
This paper examines macroprudential policies in open emerging economies. It discusses how the recent financial crisis has provided a rationale for macroprudential policies to help manage the economy and the need for policymakers to monitor the financial cycle and systemic risks. It also...
Persistent link: https://www.econbiz.de/10012460878
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The Tradeoffs in Leaning Against the Wind
Gourio, François - 2017
Credit booms sometimes lead to financial crises which are accompanied with severe and persistent economic slumps. Does this imply that monetary policy should "lean against the wind" and counteract excess credit growth, even at the cost of higher output and inflation volatility? We study this...
Persistent link: https://www.econbiz.de/10012455024