We study the dynamics linking monetary policy with bank leverage and show that adjustments in leverage act as the linchpin in the monetary transmission mechanism that works through fluctuations in risk-taking. Motivated by the evidence, we formulate a model of the risk-taking channel of monetary...

Using Benford's law, we find evidence supporting the hypothesis that countries at times misreport their economic data strategically. We group countries with similar economic conditions and find that for countries with fixed exchange rate regimes, high negative net foreign asset positions,...

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and...

This paper analyzes the initial economic conditions before IMF financial arrangements are adopted. Evidence from 104 IMF arrangements in 74 developing countries during 1973-91 indicates that there are important differences between the characteristics of countries about to undergo a program and...

This paper examines Argentina´s currency crises from 1970 to 2001, with particular attention to the role of domestic and external factors. Using VAR estimations, we find that deteriorating domestic fundamentals matter. For example, at the core of the late 1980s crises was excessively loose...

To update a famous old statistic: a political leader in a developing country is almost twice as likely to lose office in the six months following a currency crash as otherwise. This difference, which is highly significant statistically, holds regardless of whether the devaluation takes place in...

The global financial crisis posed as much of a challenge for the foreign exchange reserve policies of emerging countries as it did for their economic policies and financial systems. This pushed many countries into rethinking their strategies about foreign exchange reserves. This study presents...

The authors find evidence supporting the hypothesis that countries at times misreport their eco-nomic data in a strategic manner. Among those suspected are countries with xed exchange rate regimes, high negative net foreign asset positions or negative current account balances, which corroborates...

Target-Kredite im Eurosystem – Die Stellungnahmen der Bundesbank – Was sind Target-Salden? – Kreditverlagerung – Zur ökonomischen Interpretation der Kreditverlagerung – Target-Kredite, Leistungsbilanz und Kapitalverkehr – Fünf vor zwölf – Target-Salden in den USA – Anhang:...

The paper provides an account of the meaning and implications of TARGET 2 in the Eurozone (EZ) balance of payments crisis. In this context, it discusses Hans-Werner Sinn’s thesis about a stealth bail-out of the EZ periphery by the ECB from a heterodox perspective. Financial liberalisation, a...