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Borrowing into debt crises
Paluszynski, Radoslaw; Stefanidis, Georgios - In: Quantitative Economics 14 (2023) 1, pp. 277-308
Quantitative models of sovereign default predict that governments reduce borrowing during recessions to avoid debt crises. A prominent implication of this behavior is that the resulting interest rate spread volatility is counterfactually low. We propose that governments borrow into debt crises...
Persistent link: https://www.econbiz.de/10014536962
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A reconsideration of multiple equilibria in the analysis of one-period government bonds with default risk
Guo, Yanling - In: Economics: The Open-Access, Open-Assessment E-Journal 9 (2015) 2015-33, pp. 1-52
In this paper, the author considers sovereign debt in the form of one-period government bonds with default risk, which can be purchased by and traded among domestic and foreign investors. She shows that the "good equilibrium" is the only stable equilibrium under some quite general assumptions,...
Persistent link: https://www.econbiz.de/10011371997
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Fighting African capital flight: Trajectories, dynamics, and tendencies
Asongu, Simplice; Uduji, Joseph I.; Okolo-Obasi, Elda N. - In: Financial Innovation 6 (2020) 1, pp. 1-21
This study provides a harmonization framework for common capital flight policies in Africa. It builds on evidence of persistent extreme poverty in the continent to assess how common measures can be adopted by sampled countries on one cause of extreme poverty: capital flight. The dataset is...
Persistent link: https://www.econbiz.de/10012602850
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On the role of financial aid in a default episode
Cuadra, Gabriel; Ramos-Francia, Manuel; Garcia-Verdu, … - In: Latin American Economic Review 27 (2018) 1, pp. 1-19
Our aim is to explore the role of financial aid in a default episode. To that end, we develop a dynamic stochastic quantitative model of sovereign default featuring fiscal policy, endogenous financial aid and risk-averse foreign lenders. After calibrating the model, we feed output shocks into...
Persistent link: https://www.econbiz.de/10013205101
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A divide and conquer algorithm for exploiting policy function monotonicity
Gordon, Grey; Qiu, Shi - In: Quantitative Economics 9 (2019) 2, pp. 521-540
A divide and conquer algorithm for exploiting policy function monotonicity is proposed and analyzed. To solve a discrete problem with n states and n choices, the algorithm requires at most nlog2(n)+5n objective function evaluations. In contrast, existing methods for nonconcave problems require...
Persistent link: https://www.econbiz.de/10012215337
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Eigentum und Haftung zusammenbringen
Rocholl, Jörg - In: Vierteljahrshefte zur Wirtschaftsforschung 82 (2013) 2, pp. 149-156
Das Ziel der Einheit von Eigentum und Haftung, dem bei der Einführung des Euro unter anderem durch das No-Bailout …-Prinzip Rechnung getragen wurde, hat sich während der Finanzkrise nicht erfüllt. Viel zu häufig ist Bail-out an die Stelle von Bail …The goal of unifying ownership and liability was addressed by the no-bailout principle as part of the introduction of …
Persistent link: https://www.econbiz.de/10010464606
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Political risk guarantees and capital flows: The role of bilateral investment treaties
Mina, Wasseem - In: Economics: The Open-Access, Open-Assessment E-Journal 9 (2015) 2015-26, pp. 1-38
In this paper the author empirically examines whether the influence of bilateral investment treaties' political risk guarantees extends to other types of capital flows - FDI, private debt, public debt and portfolio equity. The paper uses panel data on middle and low income countries during the...
Persistent link: https://www.econbiz.de/10011318611
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TARGET balances: An anchor of stability
Fratzscher, Marcel; König, Philipp; Lambert, Claudia - In: DIW Economic Bulletin 3 (2013) 11/12, pp. 3-11
The debate about TARGET2, the payment system of the European System of Central Banks (ESCB), has resulted in controversial discussions in Germany in recent years. The present study by DIW Berlin concludes that fears often expressed in this context of the risks to Germany are largely unfounded....
Persistent link: https://www.econbiz.de/10010327603
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Reduced cross-border lending and financing costs of SMEs
Bremus, Franziska; Neugebauer, Katja - In: Journal of International Money and Finance 80 (2018), pp. 35-58
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis. We combine aggregate information on total and cross-border credit with firm-level survey data for the period 2010–2014. We find that the decline...
Persistent link: https://www.econbiz.de/10012021996
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Europe Needs More than a Capital Markets Union: Focus on the Integration of Euro Area Sovereign Debt Markets
Breitenfellner, Andreas; Schuberth, Helene - In: Vierteljahrshefte zur Wirtschaftsforschung 86 (2017) 2, pp. 9-20
With a view to establishing a Capital Markets Union (CMU), efforts to integrate (private) capital markets and private risk-sharing in the European Union are underway. However, the single (capital) market will be burdened by a perennial potential threat to sovereign bond market stability in the...
Persistent link: https://www.econbiz.de/10012054624