Showing 51 - 60 of 618
We extend the model used in recent quantitative studies of sovereign default, allowing policymakers of different types to stochastically alternate in power. We show that a default episode may be triggered by a change in the type of policymaker in office, and that such a default is likely to...
Persistent link: https://www.econbiz.de/10008516741
We study the sovereign default model that has been used to account for the cyclical behavior of interest rates in emerging market economies. This model is often solved using the discrete state space technique with evenly spaced grid points. We show that this method necessitates a large number of...
Persistent link: https://www.econbiz.de/10008533233
This paper argues that both horizontal and intertemporal competition among recipient governments are needed in order to ensure incentives for effective utilization of targeted transfers. This has implications for budgeting frameworks and the types of information needed that might be amenable to...
Persistent link: https://www.econbiz.de/10005248215
This paper finds optimal fiscal rule parameter values and measures the effects of imposing fiscal rules using a default model calibrated to an economy that in the absence of a fiscal rule pays a significant sovereign default premium. The paper also studies the case in which the government...
Persistent link: https://www.econbiz.de/10009650638
This paper incorporates house price risk and mortgages into a standard incomplete market (SIM) model. The model is calibrated to match U.S. data and accounts for non-targeted features of the data such as the distribution of down payments, the life-cycle profile of home ownership, and the...
Persistent link: https://www.econbiz.de/10009650640
Whether governments should issue GDP-indexed sovereign debt continues to be the subject of policy debates. This article contributes to this debate by studying the effects of issuing GDP-indexed sovereign debt contracts using the equilibrium default model studied by Aguiar and Gopinath (2006) and...
Persistent link: https://www.econbiz.de/10010593665
Persistent link: https://www.econbiz.de/10009246444
We incorporate house price risk and mortgages into a standard incomplete market (SIM) model. We calibrate the model to match U.S. data and we show that the model also ac- counts for non-targeted features of the data such as the distribution of down payments, the life-cycle profile of home...
Persistent link: https://www.econbiz.de/10009292909
Foreign investment is typically considered an important source of growth for developing countries. This article describes the legal protection granted to foreign investors and its enforcement mechanisms. Governments have signed international investment agreements intended to protect foreign...
Persistent link: https://www.econbiz.de/10009320885
In this article, we study the interplay between political factors and default decisions. First, we survey two branches of theoretical studies. One shows that governments may be willing to repay their debt because it is in the best interest of local agents with political power. The other one...
Persistent link: https://www.econbiz.de/10008917750