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This paper uses a panel structural vector autoregressive (VAR) model to investigate the extent to which global financial conditions, i.e., a global risk-free interest rate and global financial risk, and country spreads contribute to macroeconomic fluctuations in emerging countries. The main...
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We show that a model with imperfectly forecastable changes in future productivity and an occasionally binding … collateral constraint can match a set of stylized facts about "sudden stop" events. "Good" news about future productivity raises … periods. The economy exhibits a boom period in the run-up to the sudden stop, with output, consumption, and investment all …
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Over the past two decades, most emerging market economies witnessed two key developments. A marked process of financial integration with the rest of the world, arguably turning these economies more vulnerable to global financial shocks; and an improvement of macroeconomic fundamentals, helping...
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