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This document analyzes the patterns of fiscal and monetary policy in five economies of the Latin American Southern Cone (Argentina, Brazil, Chile, Paraguay and Uruguay) during four episodes of international crises: 1994, 1997-1999, 2001 and 2008. In contrast with earlier episodes when most...
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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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We endogenize the liquidity and the quality of private assets in a tractable incomplete-market model with heterogeneous … agents. The model decomposes the convenience yield of government bond into a "liquidity premium" (flight to liquidity) and a … and bond premiums, the model reveals that a sharp reduction in the quality, instead of the liquidity, of private assets …
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