This paper explores the joint effect of aggregate productivity shocks and capital market liberalization on the optimal bailout (or liquidation) policy of banks towards defaulted borrowers. It suggests that in bad times both good and bad firms default on their obligations, it is harder for the...

Economic growth slowed sharply last year in Europe and Central Asia, as Russia's invasion of Ukraine, a surge in inflation, and the sharp tightening of monetary policy and financing conditions hit private consumption, investment, and trade. The marked increase in food and energy prices boosted...

Europe and Central Asia continues to be negatively impacted by the Russian Federation's invasion of Ukraine, tighter global financial conditions, persistent inflation, and global economic fragmentation. Economic growth in the region is projected to remain weak relative to the long-term trend,...

This paper computes the default probabilities implicit in the prices of Brady bonds of seven developing countries and examines the factors that determine the high cross-correlation of the probability paths. The term structure of U.S. interest rates and the ratio of long-term foreign debt to GDP,...

This paper analyzes the determinants of the recovery ratios and survival times (time until default) for U. S. corporate bonds. We show that seniority, the type of industry in which the firm operates, and the type of restructuring attempted after default are the major determinants of the...

This report is about the twelve countries of the former Soviet Union (Eurasia). About 85 percent of the region’s economic output is in six resource-rich economies. Today, 85 percent of Eurasia’s 280 million people are no longer poor. But academics who study resource-based economies debate...

Development policy discussions in Eurasia often become debates about how economies can be made more diversified. For a region that is resource-rich, this is to be expected. But Eurasian economies have in many ways become less diversified during the past two decades. At the same time, people are...