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lending arrangements. If the collateral constraint binds, agents price in a liquidity premium on bonds that lowers the real … or spending. The price dynamics are driven solely by the liquidity premium on the debt …
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Under what conditions do countries comply with their fiscal policy rules? We tackle this question in the context of emerging countries, with a specific focus on Latin America and the Caribbean, a region where fiscal rules have become increasingly common in recent decades. Based on an original...
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