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(i.e., debt-to-asset ratios are specific to each borrower and time-varying). I model and parameterize these ratios … the source of debt which is most sensitive to shocks is foreign funding. In fact, any shock creates a wedge between the …
Persistent link: https://www.econbiz.de/10010316721
In this paper we empirically explore the relationship between debt and output in a panel of 72 countries over the … predicted by a standard small open economy model by Aguiar and Gopinath (2007), where debt and output endogenously respond to … total factor productivity (TFP) shocks. First, developing countries' debt falls after a positive output shock, while the …
Persistent link: https://www.econbiz.de/10012315471
This paper tests the effect of sovereign debt structure on default likelihood. Sovereign debt structure is identified … likelihood of default. The results provide evidence that bilateral loans, short term debt, and bank loans increase the likelihood … of default. Results also show that foreign currency denominated debt reduces default likelihood. The study provides …
Persistent link: https://www.econbiz.de/10013082631
This paper evaluates the competitive conditions in development finance and the implications for successfully mobilising private sector finance in order to achieve the United Nations Sustainable Development Goals (SDGs). Using a market definition of cross-border development finance, the analysis...
Persistent link: https://www.econbiz.de/10013403771
Financial liberalization and integration have generated disappointing results. They were supposed to set up a win-win situation: capital would flow from capital-abundant, low-return, aging industrial countries to capital-scarce, high-return, young emerging countries. Growth in receiving...
Persistent link: https://www.econbiz.de/10014150222
an informational advantage over private lenders in the market for sovereign debt. I show that the adverse selection … country welfare. However, with lending the private information of the agency will be revealed whatever its weighting of … borrower welfare vs. private lenders' profits. Multilateral lending on concessional terms also alleviates the moral hazard …
Persistent link: https://www.econbiz.de/10014189972
Although the sovereign debt crisis is worldwide considered as a main disorder affecting indebted countries' economic … pathological mechanism, which doubles the debt incurred by any country that is forced to finance through a foreign loan its overall … implemented by any one country and that, by preventing the double charge of its external debt, would allow its government to …
Persistent link: https://www.econbiz.de/10013032105
This paper explores the economic rationale of an EMU fiscal capacity. It explains that the EMU's architecture suffers from two structural weaknesses: a tendency to develop imbalances and an inherent deflationary bias. The analysis shows that the external imbalances developed during the first...
Persistent link: https://www.econbiz.de/10012914443
There is a perception that IMF programmes are not catalytic and instead associated with large capital outflows, higher … effects of IMF programmes may deter countries from asking for an IMF programme when they need one, a form of ‘IMF stigma'. We … materialise and how past experience with adverse market reactions affects subsequent IMF programme participation. Our results …
Persistent link: https://www.econbiz.de/10012915609
We investigate the role of global factors in driving cross-border capital flows. We formulate a model of gross capital flows through the banking sector and derive a closed form solution that highlights the leverage cycle of global banks and its interaction with recipient country characteristics....
Persistent link: https://www.econbiz.de/10013109273