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Short-term and long-term growth effects of exchange rate adjustment
Kočenda, Evžen; Maurel, Mathilde; Schnabl, Gunther - 2012 - Version: 22 November 2012
The European sovereign debt crisis revived the discussion concerning the pros and cons of exchange rate adjustment in the face of asymmetric shocks. Exit from the euro area is to regain rapidly international competitiveness. Exchange rate stability with structural reforms could be beneficial for...
Persistent link: https://www.econbiz.de/10009683152
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Serial Default and Debt Renegotiation
Asonuma, Tamon - 2014
Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same debt-to-GDP ratio. This paper explains this stylized fact within a dynamic stochastic general equilibrium framework by...
Persistent link: https://www.econbiz.de/10013056385
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Contagion of Sovereign Default Risk : The Role of Two Financial Frictions
Park, Jungjae - 2014
This paper develops a quantitative general equilibrium model of sovereign default with heterogeneous agents to account for spillover of default risk across countries. Borrowers (sovereign governments) and foreign lenders (investors) in the model face financial frictions, which endogenously...
Persistent link: https://www.econbiz.de/10013043457
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Sovereign Default and Capital Accumulation
Park, Jungjae - 2014
I introduce endogenous capital accumulation into an otherwise standard quantitative sovereign default model in the tradition of Eaton and Gersovitz (1981), and find that conditional on a level of debt, default incentives are U shaped in the capital stock: the economy with too small or too large...
Persistent link: https://www.econbiz.de/10013043458
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Welfare gains of bailouts in a sovereign default model
Pancrazi, Roberto; Seoane, Hernán D.; Vukotic, Marija - 2019
We examine the welfare effects of bailouts in economies exposed to sovereign default risk. When a government of a small open economy requests a bailout from an international financial institution, it receives a non-defaultable loan of size G that comes with imposed debt limits. The government...
Persistent link: https://www.econbiz.de/10012160653
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Sovereign Defaults by Currency Denomination
Jeanneret, Alexandre - 2018
This paper explores the drivers of sovereign defaults in 100 countries over the period 1996-2012. We build a new data set of sovereign defaults and find that default events on local and foreign currency bonds are equally likely. However, governments default under different economic and financial...
Persistent link: https://www.econbiz.de/10012938192
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Count the Limbs : Designing Robust Aggregation Clauses in Sovereign Bonds
Gelpern, Anna - 2016
On August 29, 2014, the International Capital Market Association (ICMA) published new recommended terms for sovereign bond contracts governed by English law. One of the new terms would allow a super majority of creditors to approve a debtor's restructuring proposal in one vote across multiple...
Persistent link: https://www.econbiz.de/10012985851
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Reprofiling Sovereign Debt
Buchheit, Lee C. - 2014
• The IMF staff's 2013 proposal to reprofile (i.e., stretch out for a short period without haircutting principal or … interest) the maturing debt of a country that has lost market access is a sensible policy in cases where the IMF is uncertain … reprofiling, the IMF could minimise holdout creditors in these operations.• The authors propose a technique for minimizing the …
Persistent link: https://www.econbiz.de/10013043303
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Exchange Rates and Monetary Spillovers
Plantin, Guillaume - 2016
When does the combination of flexible exchange rates and domestic inflation-oriented monetary policy guarantee insulation from global financial conditions? We examine a dynamic global game model of international portfolio flows where, for some combination of parameters, the unique equilibrium...
Persistent link: https://www.econbiz.de/10013001102
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Financial Deepening and International Monetary Stability
Goyal, Rishi - 2019
Recent discussions at the IMF and the G-20 on strengthening the international monetary system have emphasized, among …
Persistent link: https://www.econbiz.de/10012871908