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Financial frictions are a central element of most of the models that the literature on emerging markets crises has proposed for explaining the Sudden Stop phenomenon. To date, few studies have aimed to examine the quantitative implications of these models and to integrate them with an...
Persistent link: https://www.econbiz.de/10005130291
Financial frictions are a central element of most of the models that the literature on emerging markets crises has proposed for explaining the Sudden Stop phenomenon. To date, few studies have aimed to examine the quantitative implications of these models and to integrate them with an...
Persistent link: https://www.econbiz.de/10010944555
(Disponible en idioma inglés únicamente) El contagio financiero y las paradas repentinas de los ingresos de capitales que se experimentan durante las crisis de los mercados emergentes pueden originarse en una combinación explosiva de falta de credibilidad de políticas e imperfecciones del...
Persistent link: https://www.econbiz.de/10005130372
Financial contagion and Sudden Stops of capital inflows experienced in emerging-markets crises may originate in an explosive mix of lack of policy credibility and world capital market imperfections that afflict emerging economies with national currencies. Hence, this paper argues that abandoning...
Persistent link: https://www.econbiz.de/10005342478
This paper studies the maturity composition and the term structure of interest rate spreads of government debt in emerging markets. In the data, when interest rate spreads rise, debt maturity shortens and the spread on short-term bonds is higher than on long-term bonds. To account for this...
Persistent link: https://www.econbiz.de/10005498541
This paper builds a dynamic model of borrowing and default to study the term structure of sovereign bonds in emerging markets. The borrower in the model can buy short and long bonds at contingent prices that reflect the timing of default events. The model generates a yield curve that is upward...
Persistent link: https://www.econbiz.de/10004977919
Two years after the rescue package for Greece provided by the European Union and the International Monetary Fund in May 2010, sovereign debt crises continue to threaten a growing number of countries in the eurozone. We develop a theory for analyzing these crises based on the research of Cole and...
Persistent link: https://www.econbiz.de/10011133781
Persistent link: https://www.econbiz.de/10011265749
This paper studies linkages across sovereign debt markets when debt is unenforceable and countries choose to default and renegotiate. In the model countries are linked to one another by borrowing from a common lender. Borrowing from a common lender connects borrowing rates across countries as...
Persistent link: https://www.econbiz.de/10011080068
We build a dynamic model of international borrowing and default that can rationalize the dynamics of spread and the maturity composition of debt in the data. The spread curve reflects the dynamics of the endogenous probability of default that is persistent yet mean reverting because of the...
Persistent link: https://www.econbiz.de/10011080995