2024-03-28T19:20:25Z
https://mpra.ub.uni-muenchen.de/cgi/oai2
oai:mpra.ub.uni-muenchen.de:157
2019-09-26T08:18:07Z
7374617475733D756E707562
7375626A656374733D47:4732:473238
7375626A656374733D47:4732:473231
7375626A656374733D46:4633:463337
7375626A656374733D46:4633:463334
7375626A656374733D47:4733:473333
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/157/
How Law Affects Lending
Haselmann, Rainer
Pistor, Katharina
Vig, Vikrant
G28 - Government Policy and Regulation
G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
F37 - International Finance Forecasting and Simulation: Models and Applications
F34 - International Lending and Debt Problems
G33 - Bankruptcy ; Liquidation
A voluminous literature seeks to explore the relation between law and finance, but offers little insights into dynamic relation between legal change and behavioral outcomes or about the distributive effects of law on different market participants. The current paper disentangles the law-finance relation by using disaggregate data on banks’ lending patterns in 12 transition countries over a 8 year period. This allows us to control for country level heterogeneity and differentiate between different types of lenders. Employing a differences-in-differences methodology in an exclusive ”laboratory” setting as well as unique hand collected datasets on legal change as well as changes in
bank ownership, we find that lending volume responds positively to legal change. However,
not all legal change is equally effective. The introduction of a legal regime that
enhances each lender’s individual prospects of enforcing her claims (collateral law) results in greater increases in lending volume than changes in bankruptcy law, the essence of which is to provide an orderly liquidation or reorganization process in the presence of multiple creditors. Finally, we find that banks that newly enter the market respond more strongly to legal change than do incumbents. In particular, foreign-owned banks extend their lending volume substantially more than domestic banks.
2006-09
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/157/1/MPRA_paper_157.pdf
Haselmann, Rainer and Pistor, Katharina and Vig, Vikrant (2006): How Law Affects Lending.
en
oai:mpra.ub.uni-muenchen.de:551
2019-09-30T14:09:48Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D47:4731:473135
7375626A656374733D47:4731:473132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/551/
How a small open economy's asset are priced by heterogeneous international investors
Chang, Yanqin
F34 - International Lending and Debt Problems
G15 - International Financial Markets
G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates
We study how a small open economy’s assets are prices by heterogeneous international investors. We initially decompose the asset pricing issue into separate studies of its two ingredients: the asset’s ex post return and the investors’ stochastic discount factor.
The ex post asset return is examined in a small open economy RBC model featuring adjustment cost in investment. We derive an approximate closed-form solution for the ex post asset return using the Campbell (1994) log-linear technique. The international investors’ stochastic discount factor is taken as given by this small open economy.
To examine the international investors’ stochastic discount factor, general equilibrium analysis is called in. We do this by setting up a world economy model. In the world economy model, the production side features a world representative firm which produce the world aggregate output consumed as world aggregate consumption; the consumer side features heterogeneous international investors from N countries in a sense that there are exogenous consumption distribution shocks and the price variation across countries. The shock affects the cross-sectional distribution of consumption goods among international investors but won’t affect the world aggregate level. The market stochastic discount factor hence is derived as a function of the world aggregate consumption growth, the world aggregate price growth and the cross-sectional variances and covariance terms of individual consumption growth and price growth.
We then derive the closed-form solutions for asset prices by substituting the two ingredients, the asset’s ex post return from small open economy model and the investors’ stochastic discount factor from a general equilibrium world economy model, into the basic asset pricing formulas. Our model generates a risk premium for a small economy’s asset that tends to be low when the global economy is robust and to soar when global economy experiences a downturn. The main reason behind this is our assumption of heterogeneity across international investors. We also study the capital accumulation and capital loss/gain channels and explore their asset pricing implications. Our major finding is: For a small country that conducts fierce capital accumulation, our model predicts that its risk premium will fluctuate less broadly than one that conducts little capital accumulation.
2006-08
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/551/1/MPRA_paper_551.pdf
Chang, Yanqin (2006): How a small open economy's asset are priced by heterogeneous international investors.
en
oai:mpra.ub.uni-muenchen.de:1013
2019-10-04T06:27:13Z
7374617475733D756E707562
7375626A656374733D46:4633:463335
7375626A656374733D46:4633:463334
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/1013/
Private vs. Official Creditors: The Record Speaks
Porzecanski, Arturo C.
F35 - Foreign Aid
F34 - International Lending and Debt Problems
Here we highlight the contribution that private creditors have made to resolve expeditiously and even generously the many sovereign debt crises in which they have been involved. The road from debt restructuring to debt forgiveness – from reprofiling to cancellation, in the jargon of the official community – has been a fairly short one for commercial banks and bondholders, but a very long one for the official export-credit and foreign-aid agencies represented by the Paris Club, as well as for the multilateral agencies such as the World Bank and the IMF. They have yet to grant any debt reduction to the middle-income countries that were the object of bailouts during the 1990s and the recipients of subsequent debt relief from the private sector, and they have moved far too slowly to address the needs of the poorest countries, many of which have received substantial, upfront and unconditional debt forgiveness from private creditors.
2006-11
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/1013/1/MPRA_paper_1013.pdf
Porzecanski, Arturo C. (2006): Private vs. Official Creditors: The Record Speaks.
en
oai:mpra.ub.uni-muenchen.de:1396
2019-10-02T11:38:04Z
7374617475733D756E707562
7375626A656374733D4F:4F31:4F3139
7375626A656374733D48:4836:483633
7375626A656374733D46:4633:463334
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/1396/
External debt sustainability and domestic debt in Heavily Indebted Poor Countries
Presbitero, Andrea F.
Arnone, Marco
O19 - International Linkages to Development ; Role of International Organizations
H63 - Debt ; Debt Management ; Sovereign Debt
F34 - International Lending and Debt Problems
In this paper we stress the limits of the current debt sustainability framework used in the IMF-WB HIPC Initiative and the necessity to include domestic public debt into the analysis. The standard sustainability analysis does not take into account the fully-fledged budget constraint and the feedback effects of the fiscal and monetary adjustment required by multilateral programs. The switch from foreign to domestic borrowing, and rising domestic real interest rates are likely to undermine the overall sustainability and the success of debt relief programs. This work focuses on the evaluation of public debt sustainability in a simple accounting framework. We use data on external public debt (multilateral and bilateral) and on domestic public debt to underline how the inclusion of domestic debt into the analysis undermines the sustainability target.
2006-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/1396/1/MPRA_paper_1396.pdf
Presbitero, Andrea F. and Arnone, Marco (2006): External debt sustainability and domestic debt in Heavily Indebted Poor Countries.
en
oai:mpra.ub.uni-muenchen.de:1805
2019-09-27T23:38:21Z
7374617475733D756E707562
7375626A656374733D47:4732:473231
7375626A656374733D46:4633:463334
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/1805/
Revisiting the Level Playing Field: International Lending Responses to Divergences in Japanese Bank Capital Regulations from the Basel Accord
Chakraborty, Suparna
Allen, Linda
G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
F34 - International Lending and Debt Problems
The 1998 passage of the Land Revaluation Law in Japan provided regulatory forbearance to Japanese banks in the form of a regulatory capital infusion. We test whether this divergence from international bank capital requirements had an impact on Japanese bank lending behavior. Because this natural experiment created an exogenous supply shock, we can utilize it to disentangle demand and supply effects in order to determine the impact on Japanese bank lending in both the U.S. and Japan. We find that the infusion of regulatory capital had no aggregate impact on Japanese bank lending in Japan, but it did change the allocation of loans. Well-capitalized Japanese banks shifted their lending from low margin, less capital intensive mortgage lending toward higher yielding, more capital intensive commercial loans. Moreover, we find evidence consistent with a shifting of Japanese bank lending activity away from U.S. lending(which is predominately real estate based) to domestic lending to fund manufacturing. Thus, we find that divergences from international capital standards have significant allocative effects on lending, as well as on bank profitability.
2007-02-13
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/1805/1/MPRA_paper_1805.pdf
Chakraborty, Suparna and Allen, Linda (2007): Revisiting the Level Playing Field: International Lending Responses to Divergences in Japanese Bank Capital Regulations from the Basel Accord.
en
oai:mpra.ub.uni-muenchen.de:4524
2019-09-26T09:48:26Z
7374617475733D756E707562
7375626A656374733D46:4633
7375626A656374733D46:4633:463335
7375626A656374733D46:4633:463334
7375626A656374733D46:4635:463530
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/4524/
Private vs. Official Creditors: The Record Speaks
Porzecanski, Arturo C.
F3 - International Finance
F35 - Foreign Aid
F34 - International Lending and Debt Problems
F50 - General
An expanded and updated version of this paper was published in the Summer 2007 edition of the journal "International Finance" (see www.blackwellpublishing.com/journal.asp?ref=1367-0271). Here we highlight the contribution that private creditors have made to resolve expeditiously and even generously the many sovereign debt crises in which they have been involved. The road from debt restructuring to debt forgiveness – from reprofiling to cancellation, in the jargon of the official community – has been a fairly short one for commercial banks and bondholders, but a very long one for the official export-credit and foreign-aid agencies represented by the Paris Club, as well as for the multilateral agencies such as the World Bank and the IMF. They have yet to grant any debt reduction to the middle-income countries that were the object of bailouts during the 1990s and the recipients of subsequent debt relief from the private sector, and they have moved far too slowly to address the needs of the poorest countries, many of which have received substantial, upfront and unconditional debt forgiveness from private creditors.
2006-11
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/4524/1/MPRA_paper_4524.pdf
Porzecanski, Arturo C. (2006): Private vs. Official Creditors: The Record Speaks.
en
oai:mpra.ub.uni-muenchen.de:5484
2019-09-27T11:18:12Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D47:4731:473135
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/5484/
Distributional Effects of Boom-Bust Cycles in Developing Countries with Financial Frictions
Aysan, Ahmet Faruk
F34 - International Lending and Debt Problems
G15 - International Financial Markets
F41 - Open Economy Macroeconomics
This paper sheds light on the distributional implications of the exchange rate based stabilizations with financial imperfections when a country is populated by heterogeneous agents with respect to their source of income. This paper shows that boom-bust cycles in developing countries lead to income redistribution from tradable to nontradable sectors. Since the share of tradable sectors in aggregate GDP increases above its usual share with the devaluation of the currency, the individuals in tradable sectors pay more tax than what they receive as capital inflow in the expansion phase of the economy. The opposite holds for the individuals in nontradable sectors who gain more from the capital inflow as compared to what they lose from taxation
2006
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/5484/1/MPRA_paper_5484.pdf
Aysan, Ahmet Faruk (2006): Distributional Effects of Boom-Bust Cycles in Developing Countries with Financial Frictions.
en
oai:mpra.ub.uni-muenchen.de:5511
2019-09-27T16:54:32Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D44:4437:443732
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/5511/
Political Economic Pressures in Financial Crisis Resolution
Lim, Jamus Jerome
F34 - International Lending and Debt Problems
D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
F41 - Open Economy Macroeconomics
The free flow of global capital has resulted in destabilizing financial crises, coupled with significant redistributive effects. However, the existing literature has not adequately addressed the channels for this redistribution, nor the different factors that influence the formation of post-crisis redistributive policy. This paper develops a microfounded theoretical model that applies the modeling framework of special interest lobbying together with bilateral bargaining to the formation of equilibrium lending, bailout, and reallocation decisions. The paper then takes the theoretical model to the data, testing two key predictions of the model using both micro- and macro-level datasets. Finally, implications for international financial reform are then examined in light of the model's findings.
2007
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/5511/1/MPRA_paper_5511.pdf
Lim, Jamus Jerome (2007): Political Economic Pressures in Financial Crisis Resolution.
en
oai:mpra.ub.uni-muenchen.de:5516
2019-09-27T16:49:50Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D44:4437:443732
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/5516/
Special Interests, Regime Choice, and Currency Collapse
Lim, Jamus Jerome
F34 - International Lending and Debt Problems
D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
F41 - Open Economy Macroeconomics
With heterogeneous productivity and sticky prices in the short run, exchange rate changes can generate real effects on agents in the economy; the result is that the currency regime becomes a policy variable amenable to political competition. This paper discusses how special interests and government policymakers interact in the decisionmaking processes concerning the optimal level of the exchange rate, and how these interactions may lead to a disconnect between the exchange rate and economic fundamentals which---under appropriate conditions---may affect the timing, and possibility, of a currency crisis. The model is also tested empirically with exchange rate data from 25 countries.
2006
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/5516/1/MPRA_paper_5516.pdf
Lim, Jamus Jerome (2006): Special Interests, Regime Choice, and Currency Collapse.
en
oai:mpra.ub.uni-muenchen.de:6502
2019-09-27T16:24:03Z
7374617475733D756E707562
7375626A656374733D44:4432:443231
7375626A656374733D46:4633:463334
7375626A656374733D47:4733:473332
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/6502/
Corporate Responses to Currency Depreciations: Evidence from Indonesia
Agustinus, Prasetyantoko
D21 - Firm Behavior: Theory
F34 - International Lending and Debt Problems
G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill
This paper examines the impact of macro fluctuation on firm’s balance sheet to understand firm’s net worth as well as the corporate distress probability. We argue that debt policies could be pro-cyclical, since it enhances corporate distress risk when currency depreciation comes.
2007
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/6502/1/MPRA_paper_6502.pdf
Agustinus, Prasetyantoko (2007): Corporate Responses to Currency Depreciations: Evidence from Indonesia.
en
oai:mpra.ub.uni-muenchen.de:7199
2019-09-28T08:06:27Z
7374617475733D756E707562
7375626A656374733D46:4633:463335
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F31:4F3139
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/7199/
Long-run Trends and Recent Developments in Official Assistance from Donor Countries
White, Howard
F35 - Foreign Aid
F34 - International Lending and Debt Problems
O19 - International Linkages to Development ; Role of International Organizations
Official flows account for close to half of capital flows to developing countries, and close to 90 per cent of receipts for Sub-Saharan Africa. This paper documents trends in these official flows over the last three decades. The most striking trend has been declining aid
volume. Following two decades of relative stability, official flows have decline in the 1990s; in particular aid to just 0.2 per cent of donor GNP. A second trend is the decline in aid to low-income countries, partly as aid flows are diverted to transition economies and ‘trouble spots’. As a result of these trends, real aid per capita to Sub-Saharan Africa fell by 40 per cent in the 1990s. Continuing an existing trend, multilateral agencies have accounted for a growing share of total aid, in part as a result of the expansion of EU aid, but non-EU donors have contributed more of their aid through the UN system. Positive developments have been the increased concessionality of aid and a move toward untying.
However, substantial parts of the multilateral system, notably the World Bank, continue to extend loans rather than grants. And the move to untying is not well-established, having been somewhat reversed in some countries in recent years. Finally, the aid programme of
most donors is thinly spread over many recipients. Whilst there are good grounds to question the current fashion for selectivity, there remain good developmental arguments
for greater concentration by individual donors.
2002-11
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/7199/1/MPRA_paper_7199.pdf
White, Howard (2002): Long-run Trends and Recent Developments in Official Assistance from Donor Countries.
en
oai:mpra.ub.uni-muenchen.de:7580
2019-09-30T00:21:04Z
7374617475733D707562
7375626A656374733D46:4634:463432
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/7580/
Bank Lending and Contagion: Evidence from the Asian Crisis
Reinhart, Carmen
Kaminsky, Graciela
F42 - International Policy Coordination and Transmission
F34 - International Lending and Debt Problems
F36 - Financial Aspects of Economic Integration
This paper analyzes how the crisis in Asia spread during the second half of 1997. We cast our net
wide and investigate several possible trade and financial linkages among the Asian economies. We
construct a series of “contagion vulnerability indices,” which capture the various manifestations of
exposure through trade and finance to the initial crisis country and contrast the predictions of this
index to actual outcomes during the Asian crisis. We pay attention to the reversal in bank lending
of Japanese and European banks, which were lending heavily to emerging Asia on the eve of the
crisis. Daily interest rate and exchange rate data for Indonesia, Malaysia, the Philippines, South
Korea, and Thailand are used to assess whether the patterns of causality and interdependence
changed as the crisis spread, as well as to answer question of whether interdependence among the
Asian economies has changed as the result of the crisis.
2001
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/7580/1/MPRA_paper_7580.pdf
Reinhart, Carmen and Kaminsky, Graciela (2001): Bank Lending and Contagion: Evidence from the Asian Crisis. Published in: in Takatoshi Ito and Anne Krueger, eds. Regional and Global Capital Flows: Macroeconomic Causes and Consequences, (Chicago: University of Chicago Press for the NBER, 2001). (2001): pp. 73-99.
en
oai:mpra.ub.uni-muenchen.de:7843
2019-09-28T19:18:09Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/7843/
Hard peg and monetary unions.Main lessons from the Argentine experience
Carrera, Jorge Eduardo
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F41 - Open Economy Macroeconomics
Currency board (CB) was a corner solution for Argentine hyperinflation, however its balance is
controversial. How does a CB work as a long run regime? After evaluating the result of ten years CB
regime, we obtain important lessons for a monetary union and for dollarization proposals. We discuss:
1) the capacity of such a regime to deal with real and nominal volatility, 2) fiscal problems and debt
dynamics, 3) financial problems under currency substitution, 4) CB regime compared with dollarization
and 5) the feasibility of a single–peg CB in a flexible exchange rate world.
2004
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/7843/1/MPRA_paper_7843.pdf
Carrera, Jorge Eduardo (2004): Hard peg and monetary unions.Main lessons from the Argentine experience.
en
oai:mpra.ub.uni-muenchen.de:7867
2019-09-26T09:53:52Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D45:4534:453434
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/7867/
Default risk and income fluctuations in emerging economies
Arellano, Cristina
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
E44 - Financial Markets and the Macroeconomy
Recent sovereign defaults in emerging countries are accompanied by interest rate spikes and deep recessions. This paper develops a small open economy model to study default risk and its interaction with output, consumption, and foreign debt. Default probabilities and interest rates depend on incentives for repayment. Default occurs in equilibrium because asset markets are incomplete. The model predicts that default incentives and interest rates are
higher in recessions, as observed in the data. The reason is that in a recession, a risk averse borrower finds it more costly to repay non-contingent debt and is more likely to default. In a quantitative exercise the model matches various features of the business cycle in Argentina
such as: high volatility of interest rates, higher volatility of consumption relative to output, a negative correlation of interest rates and output and a negative correlation of the trade balance and output. The model can also predict the recent default episode in Argentina.
2008
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/7867/1/MPRA_paper_7867.pdf
Arellano, Cristina (2008): Default risk and income fluctuations in emerging economies. Published in: American Economic Review No. forthcoming (2008)
en
oai:mpra.ub.uni-muenchen.de:8133
2019-09-28T17:01:06Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D4E:4E35:4E3530
7375626A656374733D4F:4F31:4F3134
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/8133/
Development at the turn of our century
Chichilnisky, Graciela
F34 - International Lending and Debt Problems
N50 - General, International, or Comparative
O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology
Today's rapid and profound international evolution requires an update of the development agenda. As East-West relations alter radically and forge history, new trends in global capital markets; telecommunications and new technologies erode inexorably the old structures and alter permanently the economic landscape. As the century turns, traditional issues of transfer must be re-examined. New Items emerge on the development agenda.
This paper will address the first two of these development issues: capital markets and technologies; and it will examine them in connection with other more traditional issues: 1) voluntary transfers of resources; 2) the debt crisis; 3) the securing of markets for developing countries' exports.
1991
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/8133/1/MPRA_paper_8133.pdf
Chichilnisky, Graciela (1991): Development at the turn of our century. Published in: Asian Journal of Economic and Social Studies (1991)
en
oai:mpra.ub.uni-muenchen.de:8984
2019-10-07T18:56:14Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D43:4332:433233
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/8984/
Sovereign bond ratings and market spreads. a dynamic panel analysis.
Galati, Davide
Sitzia, Bruno
F34 - International Lending and Debt Problems
C23 - Panel Data Models ; Spatio-temporal Models
Abstract
This paper applies a measure of country risk to determine the evolution of credit spreads on secondary market sovereign bonds issued by emerging countries. After the Mexican financial crisis in 1995, this market has been characterised by a sharp decline of spreads which, by mid-1997, brought them to a level which was thought not to adequately cover risk. The episode has been followed in successive years by a new increase of spreads, accompanied by high volatility in concomitance with the Asian and Russian crises. In order to tackle the issue of how preads are determined, we concentrate on sovereign risk as measured by spreads on Brady bonds and specify a dynamic panel model including seven countries that are large issuers of these instruments. The analysis reveals a significant effect for economic fundamentals, but we also found that spreads are significantly affected by
shock factors: besides general financial crises, we isolated a role for commodity prices. We found an asymmetric effect for core countries interest rates, which signals the limited role for core rates in affecting the decline in spreads, that we instead attribute, besides a
bettering of fundamentals, to a spreading of lobalisation. In the post ‘97 period we found spreads grossly in line with fundamentals but we have no specific explanation to offer for the occurrence of repeated financial crises save that a general recourse to the argument of nterdependence. We think that the analysis of contagion or interdependence problems that has recently attracted much attention obviously deserves further work and possibly a different econometric technique using data at a higher frequency than the monthly data employed in this study.
2000-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/8984/1/MPRA_paper_8984.pdf
Galati, Davide and Sitzia, Bruno (2000): Sovereign bond ratings and market spreads. a dynamic panel analysis.
en
oai:mpra.ub.uni-muenchen.de:9497
2019-09-28T18:12:40Z
7374617475733D707562
7375626A656374733D4F:4F31:4F3131
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F35:4F3534
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/9497/
Evidencia empirica sobre deuda externa, inversion, y crecimiento en Mexico, 1980-2003
Flores Prieto, Pedro
Fullerton, Thomas M., Jr.
Andrade Olivas, Cesar
O11 - Macroeconomic Analyses of Economic Development
F34 - International Lending and Debt Problems
O54 - Latin America ; Caribbean
Under some conditions, it is possible that foreign debt can cause fixed investment in a country to decline. Under those circumstances, economic growth will turn negative. This theoretical possibility is known as the debt overhang hypothesis. This study investigates the debt overhang hypothesis for Mexico between 1980 and 2003. Parameter estimation results offer partial empirical evidence in favor of this hypothesis. Simulation results exhibit a high degree of correlation with actual sample data.
2007-04
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/9497/1/MPRA_paper_9497.pdf
Flores Prieto, Pedro and Fullerton, Thomas M., Jr. and Andrade Olivas, Cesar (2007): Evidencia empirica sobre deuda externa, inversion, y crecimiento en Mexico, 1980-2003. Published in: Analisis Economico , Vol. 22, No. 50 (April 2007): pp. 149-171.
es
oai:mpra.ub.uni-muenchen.de:10262
2019-10-25T18:17:13Z
oai:mpra.ub.uni-muenchen.de:10648
2019-09-30T18:52:07Z
7374617475733D707562
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/10648/
Analyzing Debt Sustainability: Concepts and Tools Applied for Guinea, Rwanda,and Senegal
Gunter, Bernhard
Wodon, Quentin
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
H63 - Debt ; Debt Management ; Sovereign Debt
A sustainable debt is a precondition for sustainable development. Yet the analysis of a country’s debt sustainability is a complex task given issues related to (1) establishing the actual debt outstanding and future debt-service obligations; (2) defining appropriate sustainability indicators; and (3) projecting future macroeconomic variables like gross domestic product, exports, interest rates, inflation rates, and exchange rates. These projections are crucial because debt sustainability analysis is necessarily forward-looking and highly sensitive to changes in these macroeconomic variables. This paper provides a case study of debt sustainability analysis in three African countries to illustrate the key concepts and complexities involved in such analysis. We begin with an overview of the main debt sustainability indicators as they typically are used in practice. We then provide a brief historical review of previous and current debt relief initiatives and illustrate how they have been applied in each of the three countries. The paper then presents the debt sustainability analyses using a recently developed simulation tool (SimSIP Debt).
2008-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/10648/1/MPRA_paper_10648.pdf
Gunter, Bernhard and Wodon, Quentin (2008): Analyzing Debt Sustainability: Concepts and Tools Applied for Guinea, Rwanda,and Senegal. Published in: Public Finance for Poverty Reduction: Concepts and Case Studies from Africa and Latin America (edited by Blanca Moreno-Dodson and Quentin Wodon, published in World Bank Directions in Development) (January 2008): pp. 311-344.
en
oai:mpra.ub.uni-muenchen.de:10778
2019-09-26T20:27:07Z
7374617475733D707562
7375626A656374733D45:4534:453433
7375626A656374733D46:4633:463334
7375626A656374733D4E:4E32:4E3233
7375626A656374733D45:4534:453434
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/10778/
Un margine di arbitraggio non sfruttato sulla Rendita Italiana a Parigi ?
Tattara, Giuseppe
E43 - Interest Rates: Determination, Term Structure, and Effects
F34 - International Lending and Debt Problems
N23 - Europe: Pre-1913
E44 - Financial Markets and the Macroeconomy
This paper assess the freedom of capital movements between France and Italy in the late 19 century looking at the market for the most important Italian bond, the Rendita Italiana.
Taking into account long time series of Rendita prices both in France and in Italy the paper looks at the possibility of a possible arbitrage profit.
The absence of any arbitrage profit (except for short periods of time) makes the author conclude on the capital mobility between the two markets
2002-04-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/10778/1/MPRA_paper_10778.pdf
Tattara, Giuseppe (2002): Un margine di arbitraggio non sfruttato sulla Rendita Italiana a Parigi ? Published in: Rivista di storia economica , Vol. XVIII, No. 2002 (1 April 2002): pp. 51-63.
it
oai:mpra.ub.uni-muenchen.de:10925
2019-09-26T18:02:08Z
7374617475733D707562
7375626A656374733D45:4536:453632
7375626A656374733D4B:4B34:4B3430
7375626A656374733D46:4633:463334
7375626A656374733D4E:4E32:4E3233
7375626A656374733D48:4833:483330
7375626A656374733D48:4836:483633
7375626A656374733D47:4732:473230
7375626A656374733D50:5035:503530
7375626A656374733D46:4634:463430
7375626A656374733D45:4535:453530
7375626A656374733D42:4231:423131
7375626A656374733D47:4731:473130
7375626A656374733D4E:4E34:4E3433
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/10925/
The medieval origins of the 'Financial Revolution': usury, rentes, and negotiablity
Munro, John H.
E62 - Fiscal Policy
K40 - General
F34 - International Lending and Debt Problems
N23 - Europe: Pre-1913
H30 - General
H63 - Debt ; Debt Management ; Sovereign Debt
G20 - General
P50 - General
F40 - General
E50 - General
B11 - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
G10 - General
N43 - Europe: Pre-1913
The basic thesis of this article is that the essential origins of the modern ‘financial revolution’ were the late-medieval responses, civic and mercantile, to financial impediments from both Church and State, concerning the usury doctrine, that reached their harmful fruition in the later thirteenth and early fourteenth century. That ‘financial revolution’, in terms of those national institutions for government borrowing and international finance, involving negotiable securities, in the form of annuities or rentes, and bills of exchange, is generally thought to have originated in eighteenth century England; but as James Tracy has earlier shown it first took place, on a fully national basis, in the sixteenth-century Habsburg Netherlands. The major obstacle from the Church was of course the usury doctrine, and more accurately the final evolution of this doctrine in Scholastic theology and canon law, along with the intensification of the campaign against usury from the early thirteenth century. The major obstacles that the State provided, with the spreading stain of ever more disruptive international warfare from the 1280s, were the nationalistic bullionist philosophies and related monetary-fiscal policies (to finance warfare) that together hindered the international flow of specie in later medieval Europe. For public borrowing, one must begin with the contentious policies of Venice, Florence, and other Italian city states in basing their finances on forced loans, which did pay interest, and thus with the usury controversies that erupted, over not just such loans, but the sale of interest-bearing debt certificates in secondary markets. The alternative solution, found elsewhere – first in northern French towns from the 1220s -- and one that would govern European public finance up to the nineteenth century, was to raise funds for urban governments through the sale of rentes, both life-rents (one or two lives) and hereditary or perpetual rents. These were not in fact loans but annuities, and hence they were not usurious, because the buyer of such rentes had no expectation of repayment (unless the government chose to redeem them); instead they represented the purchase of a continuous future stream of income (for at least one lifetime). Those rentiers who sought to regain some part of their invested capital had only one recourse: to seek out buyers in secondary markets. The true efficiency of modern public finance also rested upon the development of such markets and thus upon the development of full-fledged negotiablity; and public finance also depends upon satisfactory instruments to permit low risk, low cost international remittances. The solution to both problems lay in the development of the negotiable bill of exchange. Such bills, at first non-negotiable, emerged in the late thirteenth century as a response to circumvent not only the usury doctrine (to ‘disguise’ interest payments in the exchange rate) but also the almost universal bans on bullion exports. Yet another barrier that medieval English merchants faced was the virtual absence of deposit-banking because of the crown’s strict monopoly on the coinage and money supply, so that the usual origin of such banking, in private money-changing, was unavailable. Although English merchants sought remedies by using transferable commercial bills, they were not truly negotiable, for they had no legal standing in Common Law courts. But from the late thirteenth century, the Crown was incorporating the then evolving international Law Merchant into statutory law, and it also established law merchant courts, which did give such financial instruments some legal standing. In 1436, a London law-merchant court was the first, in Europe, to establish the principle that the bearer of a bill of exchange, on its maturity, had full rights to sue the ‘acceptor’ or payer, on whom it was drawn, for full payment and to receive compensation for damages. From that precedent, and then from those provided by similar law-merchant court verdicts in Antwerp and Bruges (1507, 1527), the Estates General of the Habsburg Low Countries (1537-1541) produced Europe’s first national legislation to ensure the full legal requirements of true negotiability – including the right to sue intervening assignees to whom bills had been transferred in payment. These Estates-General also legalized interest payments (up to 12%), thus permitting open discounting, another obviously essential feature of modern finance, private and public. Antwerp itself, with the foundation of its Bourse in 1531, became the international financial capital of Europe, especially as a secondary market in national rentes – the very instrument that became the foundation of English public finance, in the form of annuities, from the 1690s.
2002-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/10925/2/MPRA_paper_10925.pdf
Munro, John H. (2002): The medieval origins of the 'Financial Revolution': usury, rentes, and negotiablity. Published in: The International History Review , Vol. 25, No. 3 (September 2003): pp. 505-562.
en
oai:mpra.ub.uni-muenchen.de:10979
2019-10-01T04:57:04Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D43:4331:433132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/10979/
Is external debt an effective way of bringing economic reforms?
Gul, Adnan
F34 - International Lending and Debt Problems
C12 - Hypothesis Testing: General
This paper investigates the adverse effects of external debt on economic performance. In order to cater the issue of errors in mathematical model developed to analyze the correlation, this paper deals by performing a hypothetical analysis on economic growth within a country at different levels of external debt. The analysis is done on all sectors at the same time to ensure maximum accuracy. The paper concludes that debt itself is not an effective way of helping underdeveloped countries. This study adds in finding effective means which will allow underdeveloped countries to get a foothold on the development ladder of economy.
2008-09-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/10979/1/MPRA_paper_10979.pdf
Gul, Adnan (2008): Is external debt an effective way of bringing economic reforms?
en
oai:mpra.ub.uni-muenchen.de:11029
2019-09-27T19:55:58Z
7374617475733D707562
7375626A656374733D4E:4E32:4E3234
7375626A656374733D4B:4B32:4B3230
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B34:4B3430
7375626A656374733D46:4634:463432
7375626A656374733D52:5234:523430
7375626A656374733D46:4631:463130
7375626A656374733D4E:4E37:4E3733
7375626A656374733D47:4732:473238
7375626A656374733D4E:4E34:4E3433
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11029/
The 'New Institutional Economics' and the Changing Fortunes of Fairs in Medieval and Early Modern Europe: the Textile Trades, Warfare, and Transaction Costs
Munro, John H.
N24 - Europe: 1913-
K20 - General
F34 - International Lending and Debt Problems
K40 - General
F42 - International Policy Coordination and Transmission
R40 - General
F10 - General
N73 - Europe: Pre-1913
G28 - Government Policy and Regulation
N43 - Europe: Pre-1913
This paper revisits, modifies, and combines elements of three major ‘institutional’ international-trade models, none of which has yet fully received the attention that it deserves, to provide a new explanation for the growth, decline, and then rebirth of internationally-oriented fairs in the European economy, serving financial as well as commercial functions, from the 12th to late 16th centuries. The three distinguished models that provided the major inspiration for this paper are, in the chronological order of their publication: (1) the Van der Wee thesis (1970) on the macro-economic impact of the major shifts, first, from continental, overland-trade to maritime-based routes, and then back to continental-overland trade routes, over this same four-century era; (2) the North-Milgrom-Weingast ‘institutional’ model (1990) on the role of law-merchant courts and judges in reducing incentives to cheat or renege on contracts in fair-oriented trade amongst ‘unacquainted’ participants (i.e. in the Champagne Fairs), and thus in reducing transaction costs in international trade; and (3) the Epstein model (1994) on the various ways in which the later-medieval regional fairs further reduced transaction costs in commerce (even if his model implicitly contradicts elements of my own favoured Van der Wee model). The central theses of this paper are that: (1) the changing intensities, scope, and nature of late-medieval and early modern-warfare played the decisive role in determining the fate of international fairs: (a) in that the consequences of such warfare fatally undermined the economic viability of the earlier medieval fairs (English, French), by raising to a prohibitive level the transportation and other transaction costs involved in overland-continental trade, and more particularly in the mass-market trade in cheap, light textiles, on which these fairs had fundamentally depended; and thus conversely (b) that a restoration of relative security combined with other factors that reduced both transportation and transaction costs led (in accordance with the Van der Wee model) to a revival of continental, overland-trade, to a revival and even more dramatic growth in international trade in cheap textiles, and to a rebirth and renewed pre-eminence of international fairs in early modern European commerce; and (2) that the financial role of fairs was as important as their commercial role; and thus that another major factor in the pre-eminence of early-modern international fairs were financial innovations that led to full negotiability of both private and public forms of credit – especially the rentes, innovations developing chiefly out of fair-based law merchant courts (thus leading us back to the North-Milgrom-Weingast model). The chief criticisms of these models, or parts of them, lie in their inadequate or wrongly formulated explanations for the decline of the Champagne and English fairs, either by adducing incorrect arguments (North-Milgrom-Weingast) and/or by neglecting the very major adverse consequences of the spreading stain of chronic, debilitating, and ever so disruptive European and Mediterranean-wide warfare from the 1290s – and not from the Hundred Years’ War era, consequences that also fatally undermined the international trade in, and thus the production of, the cheap light textiles, over the next two centuries. Such analysis is extended to criticize other favoured models to explain the decline and fall of the Champagne Fairs: the De Roover ‘commercial revolution’ thesis on Italian branch–plant firms with their use of bills-of-exchange; the Bautier-Verlinden model on the ‘industrialization of 14th century Italy’; and the most favoured one of all – the establishment of the Italian galley route, the direct sea-route, to NW Europe. One merely has to point out the dramatic impact of the revival of overland, continental trade routes and of so many international, fairs from the 15th century, to see why these three latter theories lack credibility in explaining a general commercial-financial phenomenon on the supposed ‘decline of fairs’ in the international economy.
2000-06
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11029/1/MPRA_paper_11029.pdf
Munro, John H. (2000): The 'New Institutional Economics' and the Changing Fortunes of Fairs in Medieval and Early Modern Europe: the Textile Trades, Warfare, and Transaction Costs. Published in: Fieri e mercati nella integrazione delle economie europee, seccoli XIII - XVIII, Atti delle “Settimana di Studi” e altri convegni, no. 32, Istituto Internazionale di Storia Economica F. Datini , Vol. 32, No. 1 (2001): pp. 405-451.
en
oai:mpra.ub.uni-muenchen.de:11076
2019-09-30T05:48:07Z
7374617475733D707562
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11076/
Analyzing Debt Sustainability: An Application of SimSIP Debt for Paraguay
Gunter, Bernhard
Wodon, Quentin
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
H63 - Debt ; Debt Management ; Sovereign Debt
One of the most difficult tasks in preparing a poverty reduction strategy consists in setting priorities for public action, taking into account the cost of social programs and the capacity of the government to pay that cost. The ability to pay for social programs is determined by the resources available to the government through taxation and loans or grants within a debt and fiscal sustainability framework. This paper shows how to conduct debt and fiscal sustainability analysis using SimSIP Debt, a user-friendly Excel-based tool, with an application to Paraguay.
2008-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11076/1/MPRA_paper_11076.pdf
Gunter, Bernhard and Wodon, Quentin (2008): Analyzing Debt Sustainability: An Application of SimSIP Debt for Paraguay. Published in: Public Finance for Poverty Reduction: Concepts and Case Studies from Africa and Latin America (edited by Blanca Moreno-Dodson and Quentin Wodon, published in World Bank Directions in Development) (January 2008): pp. 165-188.
en
oai:mpra.ub.uni-muenchen.de:11077
2019-10-02T12:49:10Z
7374617475733D707562
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11077/
Debt Sustainability for Low-Income Countries: A Review of Standard and Alternative Concepts
Cassimon, Denis
Moreno-Dodson, Blanca
Wodon, Quentin
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
H63 - Debt ; Debt Management ; Sovereign Debt
Governments in low-income countries have the difficult task of making wide-ranging decisions about public spending, taxation, and borrowing. Although we can analyze at length how both public spending and taxation can be designed and implemented to contribute to growth and
poverty reduction, the biggest challenge that most developing countries face is in determining how much they can borrow without jeopardizing their long-term prospects. The objective of this paper is to introduce the key issues involved in debt sustainability analysis. We review
the main approaches developed in the literature, starting from the traditional fiscal and external approaches and covering recent alternative frameworks, such as the debt overhang analysis and the human development approach (especially as it relates to the funding requirements for
achieving the Millennium Development Goals).
2008-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11077/1/MPRA_paper_11077.pdf
Cassimon, Denis and Moreno-Dodson, Blanca and Wodon, Quentin (2008): Debt Sustainability for Low-Income Countries: A Review of Standard and Alternative Concepts. Published in: Public Finance for Poverty Reduction: Concepts and Case Studies from Africa and Latin America (edited by Blanca Moreno-Dodson and Quentin Wodon, published in World Bank Directions in Development) (January 2008): pp. 21-56.
en
oai:mpra.ub.uni-muenchen.de:11078
2019-09-27T16:30:23Z
7374617475733D707562
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D48:4832
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11078/
Public Finance for Poverty Reduction: An Overview
Moreno-Dodson, Blanca
Wodon, Quentin
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
H2 - Taxation, Subsidies, and Revenue
H63 - Debt ; Debt Management ; Sovereign Debt
Governments in low-income countries have the difficult task of making wide-ranging decisions about public spending, taxation, and borrowing with the aim of helping their countries maintain long-term debt sustainability,
achieve higher economic growth, and ultimately reduce poverty. Making such decisions is difficult because it involves considering multiple trade-offs. There are at least four reasons why designing and implementing
fiscal policies that contribute to growth and poverty reduction are particularly challenging tasks in developing countries. First, private-market failures are widespread and often unpredictable. Second, government and institutional failures also limit the effectiveness of public interventions. Third, raising public revenues is difficult in a context of macroeconomic and growth instability, high debt ratios, weak tax administration, and large informal sectors. Finally, many developing countries lack the data necessary to conduct a thorough analysis of the effect of government policies on
the poor segments of the population. Despite those challenges, however, the budget remains one of the most
important instruments (together with laws and regulations) that governments have at their disposal to foster poverty reduction. Policy makers in both developing and developed countries, as well as nongovernmental or-ganizations and providers of aid, can benefit from a deeper understanding
of how internally or externally financed public funds channeled through the budget can be used more successfully to benefit the poor in a realistic manner. This paper, which serves as an introduction to an edited volume on "Public Finance for Poverty Reduction" starts with a brief discussion of the rationale behind the role of the government in public finance. Then we discuss some of the limitations faced by governments in developing countries. We follow those discussions with an overview of
the nature and structure of the material presented in the book and with our thoughts on germane topics yet to be addressed adequately.
2008-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11078/1/MPRA_paper_11078.pdf
Moreno-Dodson, Blanca and Wodon, Quentin (2008): Public Finance for Poverty Reduction: An Overview. Published in: Public Finance for Poverty Reduction: Concepts and Case Studies from Africa and Latin America (edited by Blanca Moreno-Dodson and Quentin Wodon, published in World Bank Directions in Development) (January 2008): pp. 1-17.
en
oai:mpra.ub.uni-muenchen.de:11402
2019-09-27T05:23:49Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4630:463031
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11402/
General view regarding the recent contribution of the World Bank in Europe and Central Asia
Popescu, Ramona Florina
F34 - International Lending and Debt Problems
F01 - Global Outlook
The World Bank is the institution that assumed the role of economic and social catalyser through its structures and affiliated organisms. The article is a review of the Bank’s contribution to the development of Europe and Central Asia, as reflected by statistics. The paper presents the multiple roles the World Bank carries out in the specified regions, and the figures showing the level of preocupation for these regions on the Bank’s agenda. The author uses charts to illustrate the recent evolution of the allocations, considering both the origin and the destination of the funds (IBRD, IDA, IFC and MIGA). Last, the article refers to Romania, which beneficiates of theBank’s support in its effort to integrate in the EU and to create a viable market economy.
2008-05-24
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11402/1/MPRA_paper_11402.pdf
Popescu, Ramona Florina (2008): General view regarding the recent contribution of the World Bank in Europe and Central Asia. Published in: Analele Universitatii din Oradea , Vol. 1, (May 2008): pp. 169-175.
en
oai:mpra.ub.uni-muenchen.de:11518
2019-09-29T04:24:54Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B31:4B3132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11518/
Individual Enforcement Rights in International Sovereign Bonds
Häseler, Sönke
F34 - International Lending and Debt Problems
K12 - Contract Law
Sovereign bonds are notoriously hard to enforce. What little rights bondholders have can be vested either collectively or individually. It seems that investors, particularly in the US market, traditionally had a preference for the latter, which hindered financial market reform projects, such as the universal adoption of collective action clauses in 2003.
This paper uses a range of theoretical approaches to discuss whether it is indeed in the bondholder’s collective interest to be allowed to individually sue and attach the debtor country’s assets following a default. Furthermore, it examines the landmark case of Elliott Associates v. Peru to attempt a quantitative assessment of just how much sovereign bondholders actually value individual enforcement rights. I find that even the single most important event to reinforce creditor rights in recent years had no noticeable impact on bond prices.
2008-11-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11518/1/MPRA_paper_11518.pdf
Häseler, Sönke (2008): Individual Enforcement Rights in International Sovereign Bonds.
en
oai:mpra.ub.uni-muenchen.de:11962
2019-09-29T04:56:59Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4632:463231
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/11962/
Rethinking balance-of-payments constraints in a globalized world
Dabrowski, Marek
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F21 - International Investment ; Long-Term Capital Movements
This paper confronts the traditional balance-of-payments (BoP) analytical framework (with its dominant focus on the size of a given country’s current account imbalance and its external liabilities) with the contemporary realities of highly integrated international capital markets and cross-country capital mobility. Some key implicit assumptions of the traditional framework like those of a fixed residence of capital owners and home country bias are challenged and an alternative set of assumptions is offered. These reflect the unrestricted character of private capital flows (with no “home country bias” and fixed domicile) determined mostly by the expected rate of return. As a result, the importance of BoP constraints (in their “orthodox” interpretation) diminishes and they disappear completely with respect to individual member states within a highly integrated monetary union. This does not mean, however, immunization from other kinds of macroeconomic risks.
2006-07
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/11962/1/MPRA_paper_11962.pdf
Dabrowski, Marek (2006): Rethinking balance-of-payments constraints in a globalized world. Published in: CASE Network Studies and Analyses No. 330 (August 2006)
en
oai:mpra.ub.uni-muenchen.de:12597
2019-09-30T03:57:56Z
7374617475733D756E707562
7375626A656374733D4F:4F31:4F3131
7375626A656374733D46:4633:463334
7375626A656374733D48:4836:483633
7375626A656374733D43:4333:433333
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/12597/
Debt Relief Effectiveness and Institution Building
Presbitero, Andrea F.
O11 - Macroeconomic Analyses of Economic Development
F34 - International Lending and Debt Problems
H63 - Debt ; Debt Management ; Sovereign Debt
C33 - Panel Data Models ; Spatio-temporal Models
The history of debt relief is now particularly long, the associated costs are soaring and the outcomes are at least uncertain. This paper reviews and provides new evidence on the effects of recent debt relief programs on different macroeconomic indicators in developing countries, focusing on the Highly Indebted Poor Countries. Besides, the relationship between debt relief and institutional change is investigated to assess whether donors are moving towards and ex-post governance conditionality. Results show that debt relief is only weakly associated with subsequent improvements in economic performance but it is correlated with increasing domestic debt in HIPCs, undermining the positive achievements in reducing external debt service. Finally, there is evidence that donors are moving towards a more sensible allocation of debt forgiveness, rewarding countries with better policies and institutions.
2008-12-04
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/12597/1/MPRA_paper_12597.pdf
Presbitero, Andrea F. (2008): Debt Relief Effectiveness and Institution Building.
en
oai:mpra.ub.uni-muenchen.de:13123
2019-09-27T11:30:39Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D43:4337:433732
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13123/
Pricing the implicit contracts in the Paris Club debt buybacks
Manas, Arnaud
Daniel, Laurent
F34 - International Lending and Debt Problems
C72 - Noncooperative Games
In 2005, more than 20 billion dollars were bought back by Paris Club debtors: Russia USD 15 billion Poland USD 5.4 billion and Peru USD 1.5 billion. During the first half of 2006, more than USD 30 billion in buybacks was announced: Russia USD 22 billion, Algeria USD 8 billion dollars, Brazil USD 1.5 billion. The buybacks consisted of the prepayment of debts at par with no penalties. These transactions were carried out at a discount of more than
20% compared to their net present value. The total loss incurred by creditors in the three buybacks is estimated at more than USD 10 billion. This raises the question as to why the Paris Club creditors agreed to the buybacks voluntarily. It appears that these buybacks are the result of the exercise of specific contracts previously agreed with the debtors in the 1990s, without receiving any
compensation for this and without assessing the consequences. These implicit contracts make it possible to formalise the respective interests for creditors and
debtors. Their pricing requires the use of financial mathematics tools (derivatives) and stochastic models for interest rates (Vasicek), but applied in the Paris
Club framework.
2007-12
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13123/1/MPRA_paper_13123.pdf
Manas, Arnaud and Daniel, Laurent (2007): Pricing the implicit contracts in the Paris Club debt buybacks.
en
oai:mpra.ub.uni-muenchen.de:13398
2019-09-27T08:08:46Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4632:463231
7375626A656374733D46:4633:463333
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13398/
Debt intolerance: Executive summary
Reinhart, Carmen
F34 - International Lending and Debt Problems
F21 - International Investment ; Long-Term Capital Movements
F33 - International Monetary Arrangements and Institutions
Speaking before the IDB Board of Directors, Carmen Reinhart discussed the syndrome of “debt intolerance,” whereby countries with weak institutional structures and problematic political systems borrow in order to avoid difficult fiscal decisions but subsequently find themselves unwilling or unable to repay. Debt intolerance, it should be noted, is by no means a recent phenomenon: the historical record shows repeated defaults by several European countries before 1900 and, in some instances, well into the twentieth century.
2004
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13398/1/MPRA_paper_13398.pdf
Reinhart, Carmen (2004): Debt intolerance: Executive summary.
en
oai:mpra.ub.uni-muenchen.de:13865
2019-09-28T00:29:09Z
7374617475733D707562
7375626A656374733D48:4835:483530
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13865/
Endogenous Wealth-Depending Time Preference and Fiscal Policy in Open Economy
Dai, Meixing
H50 - General
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
In this paper, we study the effectiveness of fiscal policies in a framework of a small open economy where the behaviour of representative consumer is characterised by endogenous time preference which depends on wealth and consumption.
2003-09
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13865/1/MPRA_paper_13865.pdf
Dai, Meixing (2003): Endogenous Wealth-Depending Time Preference and Fiscal Policy in Open Economy. Published in: Economics Bulletin , Vol. 8, No. 7 (July 2007): pp. 1-7.
en
oai:mpra.ub.uni-muenchen.de:13932
2019-09-26T09:12:15Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D4E:4E32:4E3230
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13932/
Debt intolerance
Reinhart, Carmen
Rogoff, Kenneth
Savastano, Miguel
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
N20 - General, International, or Comparative
This paper introduces the concept of “debt intolerance,” which manifests itself in the extreme duress many emerging markets experience at debt levels that would seem manageable by advanced country standards. We argue that “safe” external debt-to-GNP thresholds for debt intolerant countries are low, perhaps as low as 15 percent in some cases. These thresholds depend on a country’s default and inflation history. Debt intolerance is linked to the phenomenon of serial default that has plagued many countries over the past two centuries. Understanding and measuring debt intolerance is fundamental to assess the problems of debt sustainability, debt restructuring, capital market integration, and the scope for international lending to ameliorate crises. Our goal is to make a first pass at quantifying debt intolerance, including delineating debtors’ clubs and regions of vulnerability, on the basis on a history of credit events going back to the 1820s for over 100 countries.
2003-03
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13932/1/MPRA_paper_13932.pdf
Reinhart, Carmen and Rogoff, Kenneth and Savastano, Miguel (2003): Debt intolerance. Published in: Brookings Papers on Economic Activity , Vol. 1, (March 2003): pp. 1-74.
en
oai:mpra.ub.uni-muenchen.de:13949
2019-10-01T09:52:39Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F31:4F3136
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13949/
Legal enforcement, public supply of liquidity and sovereign risk
Brutti, Filippo
F34 - International Lending and Debt Problems
O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
Sovereign debt crises in emerging markets are usually associated with liquidity and banking crises within the economy. This connection is suggested by both anecdotical and empirical evidence. The conventional view is that the domestic financial turmoil is caused by foreign creditors' retaliation. Yet, there is no clear-cut evidence supporting the existence of ``classic" default penalties (e.g., trade sanctions or exclusion from international capital markets). This paper then proposes a novel mechanism linking sovereign defaults with liquidity and banking crises without any intervention of foreign creditors. The model considers a standard unwillingness-to-pay problem assuming that: (i) the enforcement of private contracts is limited and, as a result, public debt represents a source of liquidity; (ii) the government cannot discriminate between domestic and foreign agents. In this setting, the prospect of drying up the private sector's liquidity restores the ex-post incentive to pay of the government without any need to assume foreign penalties. Nonetheless, liquidity crises might arise when economic conditions deteriorate and the government chooses opportunistically to default in order to avoid the repayment of foreign agents. The interaction between the enforcement friction and sovereign risk is then exploited to study the implications on international capital flows and legal and institutional domestic reforms.
2008-11
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13949/1/MPRA_paper_13949.pdf
Brutti, Filippo (2008): Legal enforcement, public supply of liquidity and sovereign risk.
en
oai:mpra.ub.uni-muenchen.de:13997
2019-10-10T12:27:20Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4632:463231
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/13997/
Serial default and the “paradox” of rich to poor capital flows
Reinhart, Carmen
Rogoff, Kenneth
F34 - International Lending and Debt Problems
F21 - International Investment ; Long-Term Capital Movements
Lucas (1990) argued that it was a paradox that more capital does not flow from rich countries to poor countries. He rejected the standard explanation of expropriation risk
and argued that paucity of capital flows to poor countries must instead be rooted in externalities in human capital formation favoring further investment in already capital
rich countries. In this paper, we review the various explanations offered for this “paradox.” There is no doubt that there are many reasons why capital does not flow
from rich to poor nations – yet the evidence we present suggests some explanations are more relevant than others. In particular, as long as the odds of non repayment are as
high as 65 percent for some low income countries, credit risk seems like a far more compelling reason for the paucity of rich-poor capital flows. The true paradox may not
be that too little capital flows from the wealthy to the poor nations, but that too much capital (especially debt) is channeled to “debt intolerant” serial defaulters.
2004-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/13997/1/MPRA_paper_13997.pdf
Reinhart, Carmen and Rogoff, Kenneth (2004): Serial default and the “paradox” of rich to poor capital flows. Published in: American Economic Review, , Vol. 94, No. 2 (May 2004)
en
oai:mpra.ub.uni-muenchen.de:14001
2019-10-01T22:33:33Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/14001/
Growth, External Debt Constraints and Budgetary Policies
Dai, Meixing
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
This paper extends MURPHY's (1991) analysis of alternative
lending arrangements. We incorporate the capital accumulation into the two sector model and departure from traditional model of this kind by making two assumptions. One of them is to postulate rigid wage and unemployment,
and the another is to assume sector-specic capital goods. We analyze then the long-run behavior and the short-run adjustment path for macroeconomic variables such as stock of external debt, real exchange rate, capital stocks, investment and private consumption of a small developing country in response to dierent budgetary policy changes under three alternative lending arrangements. The results suggest that, rst, the behavior of the economic system under total debt and debt-ratio arrangements are the same in the long-run and not very dierent in the short- and intermediate-run; secondly, the budgetary policies can have an inuence over the external debt in the short- and intermediate-run under the total debt ratio arrangement.
1992-04
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/14001/1/MPRA_paper_14001.pdf
Dai, Meixing (1992): Growth, External Debt Constraints and Budgetary Policies.
en
oai:mpra.ub.uni-muenchen.de:14003
2019-09-26T22:14:23Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/14003/
Technological dependence and budgetary policy in an uncertain horizon model of small open economy
Dai, Meixing
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
It is set up in this paper a formulation which endogeneizes the choice of investment inputs in open economy context where a small country may depend on foreign technology. Then it is integrated into a macroeconomic model of small
specialized country with Blanchard-Yaari type uncertain horizon consumers. Contrary to some models with ad hoc formulation, it is found in this model that generally the budgetary policy has eects on the short- and long-run capital stock. The corresponding intertemporal spill-over effects of the budgetary policy, through the supply side of economy on external position, aggregate consumption, real exchange rate and capital evaluation ratio, are also examined.
1992-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/14003/1/MPRA_paper_14003.pdf
Dai, Meixing (1992): Technological dependence and budgetary policy in an uncertain horizon model of small open economy.
en
oai:mpra.ub.uni-muenchen.de:14348
2019-10-13T18:30:40Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/14348/
Technological dependence and budgetary policy in an uncertain horizon model of small open economy
Dai, Meixing
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
It is set up in this paper a formulation which endogeneizes the choice of investment inputs in open economy context where a small country may depend on foreign technology. Then it is integrated into a macroeconomic model of small
specialized country with Blanchard-Yaari type uncertain horizon consumers. Contrary to some models with ad hoc formulation, it is found in this model that generally the budgetary policy has eects on the short- and long-run capital stock. The corresponding intertemporal spill-over effects of the budgetary policy, through the supply side of economy on external position, aggregate consumption, real exchange rate and capital evaluation ratio, are also examined.
1992-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/14348/1/MPRA_paper_14348.pdf
Dai, Meixing (1992): Technological dependence and budgetary policy in an uncertain horizon model of small open economy.
en
oai:mpra.ub.uni-muenchen.de:14661
2019-09-28T10:45:29Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F34:4F3433
7375626A656374733D4F:4F35:4F3537
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/14661/
On measuring indebtedness of African countries: A stochastic frontier debt production function
Nkamleu, Guy Blaise
F34 - International Lending and Debt Problems
O43 - Institutions and Growth
O57 - Comparative Studies of Countries
At least since the early 1990s, the problem of Africa’s debt was a recurring theme in the development debate and many suggestions for debt relief have now been implemented. However, a thorough solution is hampered by the existence of multiple ways of scaling debt. This paper provides a framework for comprehensively measuring indebtedness and gives therefore a basis for setting objective principles for debt reduction measures. The paper uses a stochastic frontier production function approach and the technical efficiency computation procedure to develop an indebtedness index for 46 African countries. The results indicate an indebtedness index across countries ranging from a minimum of 3.6 (South-Africa) to a maximum of 92 (Zambia), with an average of 69. Countries, which have experienced extended civil wars, are generally less indebted, while countries with more corrupt governments have generally contracted more multilateral debt. The paper ends by raising a number of implications for a better approach of debt management in Africa.
2006
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/14661/1/MPRA_paper_14661.pdf
Nkamleu, Guy Blaise (2006): On measuring indebtedness of African countries: A stochastic frontier debt production function. Published in: Economic Research Working Paper Series, African Development Bank No. 85 (2006): pp. 1-21.
en
oai:mpra.ub.uni-muenchen.de:14989
2019-09-26T12:46:37Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4631:463131
7375626A656374733D43:4332:433233
7375626A656374733D47:4732:473231
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/14989/
Determinants of International Bank Lending from the Developed World to East Asia
Siregar, Reza Yamora
Choy, KM
F34 - International Lending and Debt Problems
F11 - Neoclassical Models of Trade
C23 - Panel Data Models ; Spatio-temporal Models
G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
The reversal of capital flows from the banking sector, rather than portfolio equity investment, has long been considered a main reason for the severity of the East Asian financial crisis of the late 1990s. This study analyzes the factors behind the boom and bust of bank lending, focusing on loans from private banks in seven OECD countries to nine East Asian economies during the 1990–2004 period. Our findings suggest that political instability and weaknesses in the legal, judicial, and bureaucratic systems help explain the continued stagnation in lending after the financial crisis. Thus, institutional reforms are critical for East Asia to successfully compete for international bank financing.
2009-03-30
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/14989/1/MPRA_paper_14989.pdf
Siregar, Reza Yamora and Choy, KM (2009): Determinants of International Bank Lending from the Developed World to East Asia.
en
oai:mpra.ub.uni-muenchen.de:16553
2019-09-29T06:48:20Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F35:4F3533
7375626A656374733D4F:4F31:4F3130
7375626A656374733D48:4836:483630
7375626A656374733D42:4235:423530
7375626A656374733D4F:4F32:4F3230
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/16553/
The Philippines on debt row
Beja, Jr., Edsel
F34 - International Lending and Debt Problems
O53 - Asia including Middle East
O10 - General
H60 - General
B50 - General
O20 - General
Heavy indebtedness and debt service payments, indicated by debt magnitudes and shares to national budgets, revenues, or outputs, mean that spending for public infrastructure and basic services is crowded out, even as they entail more borrowings in order to timely meet debt obligations. The failure to reduce indebtedness, improve national revenues, and raise incomes has contributed to the economic decrepitude of the Philippines. Debt relief is neces-sary to pull the country out of such a state of affairs.
2009-08-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/16553/1/MPRA_paper_16553.pdf
Beja, Jr., Edsel (2009): The Philippines on debt row.
en
oai:mpra.ub.uni-muenchen.de:16748
2019-09-27T16:23:14Z
7374617475733D756E707562
7375626A656374733D47:4731:473134
7375626A656374733D45:4534:453433
7375626A656374733D46:4633:463334
7375626A656374733D45:4533:453331
7375626A656374733D4F:4F35:4F3533
7375626A656374733D45:4534:453434
7375626A656374733D47:4733:473333
7375626A656374733D46:4633:463333
7375626A656374733D4F:4F31:4F3131
7375626A656374733D46:4633:463332
7375626A656374733D45:4535:453538
7375626A656374733D45:4534:453432
7375626A656374733D4F:4F31:4F3136
7375626A656374733D45:4535:453532
7375626A656374733D45:4536:453635
7375626A656374733D46:4634:463431
7375626A656374733D46:4633:463331
7375626A656374733D47:4732:473231
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/16748/
Multiple Reserve Requirements, Exchange Rates, Sudden Stops and Equilibrium Dynamics in a Small Open Economy
Hernandez-Verme, Paula
Wang, Wen-Yao
G14 - Information and Market Efficiency ; Event Studies ; Insider Trading
E43 - Interest Rates: Determination, Term Structure, and Effects
F34 - International Lending and Debt Problems
E31 - Price Level ; Inflation ; Deflation
O53 - Asia including Middle East
E44 - Financial Markets and the Macroeconomy
G33 - Bankruptcy ; Liquidation
F33 - International Monetary Arrangements and Institutions
O11 - Macroeconomic Analyses of Economic Development
F32 - Current Account Adjustment ; Short-Term Capital Movements
E58 - Central Banks and Their Policies
E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems
O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
E52 - Monetary Policy
E65 - Studies of Particular Policy Episodes
F41 - Open Economy Macroeconomics
F31 - Foreign Exchange
G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
We model a typical Asian-crisis-economy using dynamic general equilibrium tech-niques. Exchange rates obtain from nontrivial fiat-currencies demands. Sudden stops/bank-panics are possible, and key for evaluating the merits of alternative ex-change rate regimes. Strategic complementarities contribute to the severe indetermi-nacy of the continuum of equilibria. The scope for existence and indeterminacy of equilibria and dynamic properties are associated with the underlying policy regime. Binding multiple reserve requirements promote stability under floating but increase the scope for panic equilibria under both regimes. Backing the money supply acts as a stabilizer only in fixed regimes, but reduces financial fragility under both regimes.
2009-03-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/16748/1/MPRA_paper_16748.pdf
Hernandez-Verme, Paula and Wang, Wen-Yao (2009): Multiple Reserve Requirements, Exchange Rates, Sudden Stops and Equilibrium Dynamics in a Small Open Economy.
en
oai:mpra.ub.uni-muenchen.de:17126
2019-09-26T17:31:07Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/17126/
Private Debt with Default Risk within and across Border
Gao, Xiang
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
Following Jeske's (2006) decentralized international risk sharing arrangement where residents have access to international capital markets, this paper studies the presence of resident default risk on borrowing happened between domestic agents, in addition to default risk on private debt contracts across border. The paper shows that, without the assumption of perfect domestic contract enforcement, more international risk sharing and higher welfare can be supported. Moreover, the domestic interest rate equals to the highest marginal rate of substitution in countries that are participation constrained in international financial markets. This asset pricing result overturns the well established argument that interest rate should be the lowest to induce repayment in closed economy models with domestic credit crisis.
2009-09-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/17126/1/MPRA_paper_17126.pdf
Gao, Xiang (2009): Private Debt with Default Risk within and across Border.
en
oai:mpra.ub.uni-muenchen.de:17314
2019-09-26T16:54:36Z
7374617475733D756E707562
7375626A656374733D47:4731:473134
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463333
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/17314/
Credit Derivatives and Sovereign Debt Crises
Goderis, Benedikt
Wagner, Wolf
G14 - Information and Market Efficiency ; Event Studies ; Insider Trading
F34 - International Lending and Debt Problems
F33 - International Monetary Arrangements and Institutions
Credit derivatives allow for buying protection on corporate debt, but also on sovereign debt. In this paper we examine the implications for sovereign debt crises. We show that the availability of credit protection lowers ex-ante debtor moral hazard by allowing a bondholder to improve his bargaining position in negotiations with the sovereign, thus forcing the sovereign to internalize more of the costs of a crisis. When bondholders use credit protection strategically, we additionally find that credit derivatives do not hinder an efficient resolution of crises. Crisis resolution may even be improved by facilitating conditionality. When protection is not chosen strategically,
however, credit protection may also be detrimental to crisis resolution by making restructuring more difficult. In either case we identify a role for government policy
as bondholders' choice of protection is not necessarily socially efficient.
2009-03-19
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/17314/1/MPRA_paper_17314.pdf
Goderis, Benedikt and Wagner, Wolf (2009): Credit Derivatives and Sovereign Debt Crises.
en
oai:mpra.ub.uni-muenchen.de:17334
2019-09-26T10:46:31Z
7374617475733D756E707562
7375626A656374733D46:4633:463335
7375626A656374733D46:4633:463334
7375626A656374733D48:4838:483831
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/17334/
Structural Adjustments And Their Effects: Is There A Way Out For Africa?
Ofori, Eunice
F35 - Foreign Aid
F34 - International Lending and Debt Problems
H81 - Governmental Loans ; Loan Guarantees ; Credits ; Grants ; Bailouts
The IMF and World Bank have over the years gained a stronghold in African economic policies. This is mainly due to the borrowing and lending relationship between the continent and these sister organizations. This paper seeks to address the negative effects that the IMF imposed Structural Adjustment policies have on the struggling economies of African countries and propose a solution to this problem. The paper also seeks to explore possible alternatives to taking IMF, World Bank loans and gives examples of countries who have explored such options successfully.
2009-09-12
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/17334/1/MPRA_paper_17334.pdf
Ofori, Eunice (2009): Structural Adjustments And Their Effects: Is There A Way Out For Africa?
en
oai:mpra.ub.uni-muenchen.de:17758
2019-10-01T09:18:11Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D48:4835:483536
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/17758/
The Vicious Cycle of the Foreign Military Debt
Stavrinos, Vasilios G.
Zombanakis, George A.
F34 - International Lending and Debt Problems
H56 - National Security and War
This paper aims at estimating first the effects of defense spending on the main determinants of growth, and second the extent to and the channels through which the military debt of Greece influences the overall debt burden of the country, and consequently the critical determinants of economic growth and development. Increased imports of sophisticated weapons and military equipment can be financed at the cost of investment (guns v. ploughshares), or/and at the cost of human capital formation (guns v. butter and chalk), or at the cost of increasing the foreign debt of the country. It is this last case which is investigated in this paper. Our empirical results indicate that whatever the necessity and the benefits of the security aspect of defense, its economic costs are quite substantial. The military as a claimant of resources has a negative and non trivial effect on physical capital accumulation, and human capital formation. Moreover, financing increased military imports through borrowing from abroad has a negative and significant effect on the determinants of growth and development.
1998-03-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/17758/1/MPRA_paper_17758.pdf
Stavrinos, Vasilios G. and Zombanakis, George A. (1998): The Vicious Cycle of the Foreign Military Debt. Published in: European Research Studies , Vol. 1, No. 1 (May 1998): pp. 5-26.
en
oai:mpra.ub.uni-muenchen.de:18246
2019-09-27T22:20:28Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463331
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18246/
Political Uncertainty and the Peso Problem
Javier, Garcia-fronti
Lei, Zhang
F34 - International Lending and Debt Problems
F31 - Foreign Exchange
This paper analyses the relation between political uncertainty and the Peso Problem in emerging markets. Initially, it is assumed that the country has a hard peg system (the present government will never devalue). As for the political opposition, however, it is open to
the possibility of leaving the fixed regime when it comes to power. Assuming that the change of government follows a Poisson distribution, our model shows that the expectations
of a devaluation under the subsequent new government may drive up country risk premium under the first government. Sovereign spreads in Argentina in 2001 are used to illustrate the argument.
2006
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18246/1/MPRA_paper_18246.pdf
Javier, Garcia-fronti and Lei, Zhang (2006): Political Uncertainty and the Peso Problem.
en
oai:mpra.ub.uni-muenchen.de:18260
2019-09-30T03:48:56Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4533:453332
7375626A656374733D47:4731:473135
7375626A656374733D46:4634:463431
7375626A656374733D45:4536:453631
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18260/
Trade Openness and the Cost of Sudden Stops: The Role of Financial Friction
Liu, Xuan
F34 - International Lending and Debt Problems
E32 - Business Fluctuations ; Cycles
G15 - International Financial Markets
F41 - Open Economy Macroeconomics
E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination
This paper studies the long-run welfare effect of the extra volatility of country spread due to the possibility of sudden stops. Both analytical and numerical results
show that sudden stops have weaker output impact when the small open economy is more open to trade. However, welfare consequences and policy implication of sudden stops depend on the financial friction faced by the small open economy. When it is free to adjust foreign debt, the cost of sudden stops is decreasing in trade openness, which implies the optimality of open trade policy. In this case, external shocks may be welfare improving. In addition, the economy will gain from counter-cyclical tariff rate policies. On the other hand, when it is costly to adjust foreign debt, the cost of sudden stops may be increasing in trade openness, which implies the optimality of a closed
trade policy. In this case, the nature of the policy and how the government implements the policy matter. The results hold in economies with and without the working capital constraint, and in economies with GHH preferences and Cobb-Douglas preferences.
2007-05-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18260/1/MPRA_paper_18260.pdf
Liu, Xuan (2007): Trade Openness and the Cost of Sudden Stops: The Role of Financial Friction.
en
oai:mpra.ub.uni-muenchen.de:18340
2019-09-27T10:09:22Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4533:453332
7375626A656374733D47:4731:473135
7375626A656374733D46:4634:463431
7375626A656374733D45:4536:453631
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18340/
Trade Openness and the Cost of Sudden Stops: The Role of Financial Frictions
Liu, Xuan
F34 - International Lending and Debt Problems
E32 - Business Fluctuations ; Cycles
G15 - International Financial Markets
F41 - Open Economy Macroeconomics
E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination
This paper analyzes the trade policy when country spread becomes more volatile due to the possibility of sudden stops. Both analytical and numerical results show that sudden stops have weaker output impact when the small open economy is more open to trade; however, this does not imply the optimality of an open trade policy. When the economy does not pay additional expenses to adjust its foreign debt, the cost of sudden stops is decreasing in trade openness, which implies the optimality of an open trade policy. In this case, external shocks may be welfare improving. The economy will gain from counter-cyclical tariff rate policies. On the other hand, when the economy has to pay additional expenses to adjust its foreign debt, a closed trade policy is optimal. In this latter case, the nature of the policy and how the government implements the policy matter. The results hold in economies with and without the working capital constraint, and in both economies with GHH preferences and those with Cobb-Douglas preferences.
2007-05-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18340/3/MPRA_paper_18340.pdf
Liu, Xuan (2007): Trade Openness and the Cost of Sudden Stops: The Role of Financial Frictions.
en
oai:mpra.ub.uni-muenchen.de:18377
2019-09-28T02:15:18Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18377/
Private Debt with Default Risk within and across Border
Gao, Xiang
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
Following Jeske's (2006) decentralized international risk sharing arrangement where residents have access to international capital markets, this paper studies the presence of resident default risk on borrowing happened between domestic agents, in addition to default risk on private debt contracts across border. The paper shows that, without the assumption of perfect domestic contract enforcement, more international risk sharing and higher welfare can be supported. Moreover, the domestic interest rate equals to the highest marginal rate of substitution in countries that are participation constrained in international financial markets. This asset pricing result overturns the well established argument that interest rate should be the lowest to induce repayment in closed economy models with domestic credit crisis.
2009-09-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18377/1/MPRA_paper_18377.pdf
Gao, Xiang (2009): Private Debt with Default Risk within and across Border.
en
oai:mpra.ub.uni-muenchen.de:18379
2019-10-06T05:59:07Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18379/
Private Debt with Pervasive Default Risk
Gao, Xiang
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
This paper studies the effects of private debts on risk sharing and welfare, in which I assume individual residents have access to both international and domestic capital markets. Like Jeske (2006), I make the assumption that domestic residents cannot commit to repay their debts across border. The previous literature assumes contracts are perfectly enforceable within border, and hence the marginal rate of substitution must be equal among all residents in any one country. The novel feature in this model is to bring limited commitment into debt contracts signed between domestic residents. The pervasive risk of repudiation creates different domestic asset pricing rules for countries that are constrained in international financial market. Constrained country's domestic interest rate is equal to the reciprocal of the lowest marginal rate of substitution within that country. However, non-constrained countries still have equalized marginal rate of substitution which determines the international interest rate. A wider gap between domestic and international financing cost emerges in this model and leads to harsher punishment for international debt defaulters. Although limited domestic risk sharing hinders aggregate welfare reaching an even higher standard, it has no negative effect on the original level in Jeske's setup. As a result, my model allows more international risk sharing and higher welfare. I show how this improvement depends on the interaction between preventing within and across border default in equilibrium. I also explore the role of endogenous borrowing constraints, international borrowing by using other domestic residents as intermediaries and the specification of deviation penalty.
2009-09-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18379/1/MPRA_paper_18379.pdf
Gao, Xiang (2009): Private Debt with Pervasive Default Risk.
en
oai:mpra.ub.uni-muenchen.de:18780
2019-09-28T06:16:56Z
7374617475733D696E7072657373
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463330
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18780/
Latin America: The Missing Financial Crisis
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F30 - General
F41 - Open Economy Macroeconomics
The current episode (2007-09) may well be the first time since Latin America gained its independence in the early 1800s that a major economic contraction and financial calamity in the industrialized world has not caused a wave of currency, sovereign debt or banking crises in the region. What explains Latin America's unprecedented resilience in contrast with, for example, Eastern Europe's now-evident financial vulnerability? Here we review the enormous progress made by many governments in Latin America in the past decade to reduce currency mismatches, allow for more flexible exchange-rate regimes, enhance the capitalization, funding and supervision of their banking systems, encourage the development of local capital markets, and implement sounder and more credible monetary and fiscal policies. Evidently, it is not necessary to wait for an improved international financial regulation in order for reform-minded, well-managed countries to reap the most benefits from, and minimize the deleterious impact of market cycles typical of, financial globalization.
2009-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18780/1/MPRA_paper_18780.pdf
Porzecanski, Arturo C. (2009): Latin America: The Missing Financial Crisis. Forthcoming in: ECLAC Washington Office Studies and Perspectives Series No. 6 (October 2009)
en
oai:mpra.ub.uni-muenchen.de:18854
2019-10-01T01:58:40Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4631:463131
7375626A656374733D46:4631:463137
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18854/
Equilibrium sovereign default with endogenous exchange rate depreciation
Popov, Sergey V.
Wiczer, David G.
F34 - International Lending and Debt Problems
F11 - Neoclassical Models of Trade
F17 - Trade Forecasting and Simulation
Sovereign default is often associated with disturbances in a country’s trade relations. Often the defaulter’s currency depreciates while trade volume falls drastically. This paper develops a model to incorporate real depreciation along with sovereign bankruptcy. The exchange rate is determined in equilibrium as the relative price of imports. We demonstrate that a default episode can imply up to a 30% real depreciation. This matches the depreciations observed in crisis events for developing countries. We argue that much of the exchange rate movement is explained by market clearing adjustments to trade disruptions in the aftermath of default.
2009-11-24
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18854/1/MPRA_paper_18854.pdf
Popov, Sergey V. and Wiczer, David G. (2009): Equilibrium sovereign default with endogenous exchange rate depreciation.
en
oai:mpra.ub.uni-muenchen.de:18974
2019-09-30T11:55:03Z
7374617475733D696E7072657373
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463330
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18974/
Latin America: The Missing Financial Crisis
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F30 - General
F41 - Open Economy Macroeconomics
The current episode (2007-09) may well be the first time since Latin America gained its independence in the early 1800s that a major economic contraction and financial calamity in the industrialized world has not caused a wave of currency, sovereign debt or banking crises in the region. What explains Latin America's unprecedented resilience in contrast with, for example, Eastern Europe's now-evident financial vulnerability? Here we review the enormous progress made by many governments in Latin America in the past decade to reduce currency mismatches, allow for more flexible exchange-rate regimes, enhance the capitalization, funding and supervision of their banking systems, encourage the development of local capital markets, and implement sounder and more credible monetary and fiscal policies. Evidently, it is not necessary to wait for an improved international financial regulation in order for reform-minded, well-managed countries to reap the most benefits from, and minimize the deleterious impact of market cycles typical of, financial globalization.
2009-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18974/1/MPRA_paper_18974.pdf
Porzecanski, Arturo C. (2009): Latin America: The Missing Financial Crisis. Forthcoming in: ECLAC Washington Office Studies and Perspectives Series No. 6 (October 2009)
en
oai:mpra.ub.uni-muenchen.de:18980
2019-10-02T17:27:35Z
7374617475733D707562
7375626A656374733D46:4634:463432
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463330
7375626A656374733D47:4733
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/18980/
Functional overview of financial crises development and propagation
Popa, Catalin C.
F42 - International Policy Coordination and Transmission
F34 - International Lending and Debt Problems
F30 - General
G3 - Corporate Finance and Governance
The U.S. sub-prime crise developed in the last few months as a dangerous syncope for the entire international financial system, recall for the rethinking of market functionality, revealing the international institutional weakness in financial system supervision on global scale. The mortgage volatility induced by the international dereglementation and derivates contemporary burst, correlated with a relaxed supervision framework, transformed progressively the credit market into a system “bubble”, making possible the distortion of real estates values toward those levels forced by creditors. Throughout a weakness chain, many financial institutions, determined by a savage competition on this sector, left away the prudence and borrowed money from different investors, guarantying the long terms transactions, with short time derivates from speculative short-term market, supplying the bubble. In this context, the paperwork is meant to recall for reinventing the risks models, so that the crises to be anticipated earlier than its development moment.
2009-01-19
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/18980/1/MPRA_paper_18980.pdf
Popa, Catalin C. (2009): Functional overview of financial crises development and propagation. Published in: KBO Journal , Vol. 1, No. 1 (10 January 2009): pp. 112-118.
en
oai:mpra.ub.uni-muenchen.de:19159
2019-09-28T14:10:47Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4632:463231
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/19159/
Les déterminants des flux de capitaux privés dans l’UMOA: Une approche empirique sur données de panel
Kinda, Tidiane
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F21 - International Investment ; Long-Term Capital Movements
F41 - Open Economy Macroeconomics
This article uses the push-pull factors approach to analyze the determinants of private capital flows (foreign direct investments, portfolio investments, and debt) in West African Economic and Monetary Union (WAEMU) over the period 1970-2003. The results show that (i) infrastructure, trade openness, and political instability are the main determinants of foreign direct investments; (ii) economic growth, trade openness, and infrastructure significantly explain portfolio investments; and (iii) inflation, infrastructure, and public consumption determine debt flows. Robustness checks show that these results do not depend on particular countries in the sample.
2008
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/19159/1/MPRA_paper_19159.pdf
Kinda, Tidiane (2008): Les déterminants des flux de capitaux privés dans l’UMOA: Une approche empirique sur données de panel. Published in: Revue de la Stabilité Financière dans l'Union Economique et Monétaire Ouest Africaine , Vol. 2, No. June (June 2008): pp. 41-68.
fr
oai:mpra.ub.uni-muenchen.de:20608
2019-09-27T04:36:06Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D47:4733:473338
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/20608/
Romania's public debts and their consequences upon the economy
Popa, Ionela
Codreanu, Diana
Albici, Mihaela
F34 - International Lending and Debt Problems
G38 - Government Policy and Regulation
H63 - Debt ; Debt Management ; Sovereign Debt
In June 2009, Romania’s public debts rose by 12.6% more than late last year, that is up to 123.61 billion Lei (29.4 billion Euros), meaning 23.27% of the gross domestic product originally estimated for this year.
Foreign loans are not a new phenomenon. Yet, in the current economic context, it is the consequences which might occur that bother most of us as a result of the (significant) increase of public debts.
Concluding a loan agreement with the International Monetary Fund is « necessary evil » because it has both advantages and disadvantages. This paper aims at analyzing aspects regarding the benefits, direct and indirect costs, and social effects of such a loan.
2010-02-09
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/20608/1/MPRA_paper_20608.pdf
Popa, Ionela and Codreanu, Diana and Albici, Mihaela (2010): Romania's public debts and their consequences upon the economy. Published in: Conference Proceedings 3, The 15-th International Conference the Knowledge-Based Organization (27 November 2009): pp. 140-143.
en
oai:mpra.ub.uni-muenchen.de:20794
2019-09-27T14:10:20Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/20794/
Default Risk and Risk Averse International Investors
Lizarazo, Sandra
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
F41 - Open Economy Macroeconomics
This paper develops a model of debt and default for small open economies that interact with risk averse international investors. The model developed here extends the recent work on the analysis of endogenous default risk to the case in which international investors are risk averse agents with decreasing absolute risk aversion (DARA). By incorporating risk averse investors who trade with a single emerging economy, the present model offers two main improvements over the standard case of risk neutral investors: i.) the model exhibits a better fit of debt-to-output ratio and ii.) the model explains a larger proportion and volatility of the spread between sovereign bonds and riskless assets. The paper shows that if investors have DARA preferences, then the emerging economy's default risk, capital flows, bond prices and consumption are a function not only of the fundamentals of the economy---as in the case of risk neutral investors---but also of the level of financial wealth and risk aversion of the international investors. In particular, as investors become wealthier or less risk averse, the emerging economy becomes less credit constrained. As a result, the emerging economy's default risk is lower, and its bond prices and capital inflows are higher. Additionally, with risk averse investors, the risk premium in the asset prices of the sovereign countries can be decomposed into two components: a base premium that compensates the investors for the probability of default (as in the risk neutral base) and an ``excess'' premium that compensates them for taking the risk of default.
2010-01-24
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/20794/1/MPRA_paper_20794.pdf
Lizarazo, Sandra (2010): Default Risk and Risk Averse International Investors.
en
oai:mpra.ub.uni-muenchen.de:20795
2019-09-28T14:33:12Z
7374617475733D756E707562
7375626A656374733D46:4634:463432
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
7375626A656374733D45:4534:453434
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/20795/
Contagion of Financial Crises in Sovereign Debt Markets
Lizarazo, Sandra
F42 - International Policy Coordination and Transmission
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
E44 - Financial Markets and the Macroeconomy
This paper develops a quantitative model of contagion of financial crisis and sovereign default for small open economies that cannot credibly commit to honor their international debts and have common international risk averse investors. The existence of common investors with preferences that exhibit decreasing absolute risk aversion (DARA) generates financial links between the emerging economies sovereign debt markets that help to explain the endogenous determination of credit limits, capital flows, and the risk premium in sovereign bond prices as function not only of the economy's fundamentals, the investors' characteristics (wealth, and degree of risk aversion) but more importantly of the fundamentals of other emerging economies. Therefore this paper provides a theoretical formalization that is the base for and endogenous explanation of the contagion of financial crises. The model shows that whenever a country suffers a domestic shock that forces it to default in its debts, this domestic shock will affect the investor's wealth and therefore her tolerance of risk, producing a contagion of the crisis in those countries whose fundamentals are not solid enough. Also, even when the crisis in a country does not force such country to default, the domestic shock affects the overall riskiness of the investor's portfolio, forcing her to rebalance it. In this case the investor moves away from countries that are ``too'' risky towards countries that are relatively solid, exhibiting a behavior consistent with the observed phenomena denominated as ``flight to quality''. Quantitatively, the application of the model to the case of the Argentinean default of $2001$ and the posterior contagion of the crisis to the neighboring country Uruguay shows that the model with financial links is not only consistent with the business cycle behavior of emerging economies considered but it is also superior to models that do not contemplate such links in the following dimensions: i.) the model explains a larger proportion and volatility of the spread between sovereign bonds and riskless assets; ii.) the model explains endogenously the positive correlation between the economies' sovereign bonds spreads, debt flows and consumptions, and iii.) the model exhibits the behavior observed in the data of higher volatility and comovement of the series of emerging economies during periods of volatility in financial markets prompted by the crisis in some emerging country.
2009-02-06
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/20795/1/MPRA_paper_20795.pdf
Lizarazo, Sandra (2009): Contagion of Financial Crises in Sovereign Debt Markets.
en
oai:mpra.ub.uni-muenchen.de:20857
2019-09-29T04:37:59Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4635
7375626A656374733D46:4633
7375626A656374733D46:4635:463531
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/20857/
When Bad Things Happen to Good Sovereign Debt Contracts: The Case of Ecuador
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F5 - International Relations, National Security, and International Political Economy
F3 - International Finance
F51 - International Conflicts ; Negotiations ; Sanctions
The lesson from abundant history is that, despite decades of constructive innovations in international loan and bond contracts involving sovereign financial obligations, lawyers, bankers, analysts and investors are best advised to operate under no illusions: Sovereigns are indeed sovereign. To those who harbored the hope that Argentina’s bad behavior as a sovereign debtor was a major exception that would not soon be repeated, the case of Ecuador’s latest default on shaky claims of the “illegitimacy” of some of its obligations demonstrates that while the absence of sovereign willingness to pay remains rare, it is not rare enough. These rogue sovereign debtors can be effectively restrained only by the forceful actions of other sovereigns, bilaterally or multilaterally, but in this case, in a repetition of attitudes shown toward Argentina since 2002, the international official community not only failed to condemn Ecuador’s actions, but actually expressed verbal and provided financial support. The government in Quito gathered no plaudits from the many national and international NGOs that have been campaigning for the massive forgiveness of developing-country debt, but at least this attitude is understandable: the case of Ecuador did not lend itself to arguments in favor of repudiation on “odious debt” or any related grounds. Above all, the country provides a useful, cautionary tale of the bad things that can happen to good sovereign debt contracts.
2010-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/20857/1/MPRA_paper_20857.pdf
Porzecanski, Arturo C. (2010): When Bad Things Happen to Good Sovereign Debt Contracts: The Case of Ecuador.
en
oai:mpra.ub.uni-muenchen.de:21625
2019-10-04T06:43:14Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4634:463431
7375626A656374733D46:4633:463331
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/21625/
External constraint and financial crises with balance sheet effects
Dai, Meixing
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F41 - Open Economy Macroeconomics
F31 - Foreign Exchange
This paper investigates the dynamic implications of Krugman’s (1999) model of financial crises with balance-sheet effects, which has a considerable impact on the literature as well as the teaching of international financial crisis. By explicitly taking account of wealth accumulation and external equilibrium condition, it is shown that a financial crisis in emerging market economies, instead of being interpreted as a jump from a good to a bad equilibrium with zero investment and zero foreign debt, could be explained as a jump from an unstable dynamic trajectory to a stable one. The dynamic framework illustrates well the analysis of different factors at the origin of financial vulnerability and crisis. By discriminating the financial crises according to the severity of their negative impacts on the domestic economy, the present study also adds some insights in the analysis of policy implications.
2010-03-24
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/21625/1/MPRA_paper_21625.pdf
Dai, Meixing (2010): External constraint and financial crises with balance sheet effects.
en
oai:mpra.ub.uni-muenchen.de:21918
2019-09-27T16:40:16Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B33:4B3333
7375626A656374733D4B:4B31:4B3132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/21918/
Trustees versus Fiscal Agents and Default Risk in International Sovereign Bonds
Häseler, Sönke
F34 - International Lending and Debt Problems
K33 - International Law
K12 - Contract Law
Over the last ten years, institutions such as the IMF have launched several initiatives to change market
practice with respect to sovereign bond contract drafting in order to ease restructuring after defaults. The
first of these, the universal adoption of collective action clauses, was embraced by the market after some
hesitation. Another proposal - the more widespread appointment of trustees to represent bondholders in
times of crisis, to centralise enforcement action against the debtor and thus to facilitate debt relief - has so
far failed to have the desired impact. Amongst other potential reasons for this failure, the argument has
been made that to vest enforcement rights in the trustee, as opposed to individual bondholder rights,
would be to reduce the deterrence against opportunistic defaults and thus to exacerbate moral hazard.
Using a sample of secondary market bond spreads and information on default status, this paper assesses
empirically whether sovereign bonds issued under a trust structure indeed carry a higher default risk. It
finds no systematic evidence of either a spread premium or higher actual default rates for bonds with
collective enforcement rights.
2010-01-23
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/21918/1/MPRA_paper_21918.pdf
Häseler, Sönke (2010): Trustees versus Fiscal Agents and Default Risk in International Sovereign Bonds.
en
oai:mpra.ub.uni-muenchen.de:23173
2019-09-27T16:09:35Z
7374617475733D756E707562
7375626A656374733D45:4531:453132
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463431
7375626A656374733D45:4531:453131
7375626A656374733D48:4836
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/23173/
Δυναμική του χρέους, ‘δίδυμα ελλείμματα’ και διεθνής ανταγωνιστικότητα της ελληνικής οικονομίας
Mariolis, Theodore
Papoulis, Κostas
E12 - Keynes ; Keynesian ; Post-Keynesian
F34 - International Lending and Debt Problems
F41 - Open Economy Macroeconomics
E11 - Marxian ; Sraffian ; Kaleckian
H6 - National Budget, Deficit, and Debt
This paper explores the dynamics of the Greek public debt and its relationship with the ‘twin deficits’, that is, the public and current account deficits. By modeling the evolution of these variables and using actual data of the Greek economy, this paper shows that the public debt is unsustainable as the ‘twin deficits’ are expected to persist. The causa causans of this persistence is the erosion of the international competitiveness of the country. Under these circumstances, the contemplation of policies such as reduction in government expenditures and cuts in unit labour costs in the private sector seems to be the only available, although too little too late ‘remedy’.
2010-06
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/23173/1/MPRA_paper_23173.pdf
Mariolis, Theodore and Papoulis, Κostas (2010): Δυναμική του χρέους, ‘δίδυμα ελλείμματα’ και διεθνής ανταγωνιστικότητα της ελληνικής οικονομίας.
el
oai:mpra.ub.uni-muenchen.de:23232
2019-09-29T04:34:51Z
7374617475733D756E707562
7375626A656374733D45:4536:453632
7375626A656374733D4F:4F32:4F3233
7375626A656374733D4F:4F31:4F3131
7375626A656374733D48:4835:483530
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F35:4F3533
7375626A656374733D48:4836:483633
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/23232/
The Philippines on debt row
Beja, Edsel Jr.
E62 - Fiscal Policy
O23 - Fiscal and Monetary Policy in Development
O11 - Macroeconomic Analyses of Economic Development
H50 - General
F34 - International Lending and Debt Problems
O53 - Asia including Middle East
H63 - Debt ; Debt Management ; Sovereign Debt
Heavy indebtedness and debt service payments, indicated by debt magnitudes and shares to national budgets, revenues, or outputs, mean that spending for public infrastructure and basic services is crowded out, even as they entail more borrowings in order to timely meet debt obligations. The failure to reduce indebtedness, improve national revenues, and raise incomes has contributed to the economic decrepitude of the Philippines. Debt relief is neces-sary to pull the country out of such a state of affairs.
2009-08-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/23232/1/MPRA_paper_23232.pdf
Beja, Edsel Jr. (2009): The Philippines on debt row.
en
oai:mpra.ub.uni-muenchen.de:23598
2019-09-28T08:54:55Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D45:4535:453532
7375626A656374733D45:4534:453434
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/23598/
Optimal Monetary Policy with Non-Zero Net Foreign Wealth
Mykhaylova, Olena
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
E52 - Monetary Policy
E44 - Financial Markets and the Macroeconomy
I study the impact of net foreign wealth on the optimal monetary policy of an open economy in a two-country DSGE model with incomplete markets, sticky prices and deviations from the Law of One Price. I find that by optimally manipulating monetary policy, central banks can affect the timing of interest receipts (or payments) and therefore increase the risk-sharing role of the internationally traded asset. In particular, debtor nations find it optimal to allow their currency to float relatively more freely than do creditor nations. In order to maximize consumer welfare, in most specifications of the model central bank should target a weighted average of CPI inflation and changes in the nominal exchange rate.
2010-07-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/23598/1/MPRA_paper_23598.pdf
Mykhaylova, Olena (2010): Optimal Monetary Policy with Non-Zero Net Foreign Wealth.
en
oai:mpra.ub.uni-muenchen.de:24514
2019-09-27T10:11:30Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D47:4731:473135
7375626A656374733D4F:4F31:4F3136
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24514/
The Effect of Financial Liberalization on the Economic Development Process in case of Inefficient Banking
Nabi, Mahmoud Sami
Rajhi, Taoufik
F34 - International Lending and Debt Problems
G15 - International Financial Markets
O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
In this essay we develop a stylized model to investigate the role of external financial liberalization in the development process of a small economy. Firstly, we show that there exists an economic development threshold under which the capital account liberalization can not occur. Secondly, we show that in the presence of banking inefficiency, the financial liberalization presents a major risk for the economic development process. Indeed, if the economy is situated in a vulnerability region every bad performance of the investment sector could degenerate in a banking crisis delaying the development process by several periods relatively to the situation of closed economy. Finally, it is also shown that reducing the credit market imperfection decreases the likelihood of a banking crisis.
2002-09
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24514/1/MPRA_paper_24514.pdf
Nabi, Mahmoud Sami and Rajhi, Taoufik (2002): The Effect of Financial Liberalization on the Economic Development Process in case of Inefficient Banking.
en
oai:mpra.ub.uni-muenchen.de:24515
2019-09-28T04:36:04Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D47:4731:473135
7375626A656374733D47:4731:473138
7375626A656374733D46:4633:463331
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24515/
Banking Performance and Speculative Attacks Under Asymmetric Information
Nabi, Mahmoud Sami
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
G15 - International Financial Markets
G18 - Government Policy and Regulation
F31 - Foreign Exchange
The Asian financial crisis of 1997 evolved through many stages. Although there is a consensus among economists on its "ingredients", a disagreement still exists about the exact mechanisms. This paper proposes a model explaining the triggering event of the crisis as represented by the abandon of Thailand and Korea of their fixed exchange rate.
The model suggests that an external negative shock to the price of tradable goods can be the detonator of a currency crisis if some ingredients already exist. In this context,
I show that the efficiency of the banking system and the speculators-government interaction play crucial roles. Under certain conditions, an efficient banking system
enables the economy to resist to even high magnitudes of the shock, while an inefficient one leads to a currency crisis. In this model, abandoning the fixed parity implies a cost to the government and characterizes its type. Speculators infer the government's type when deciding to attack the currency. The paper has the following innovation: it shows that a slight variation in speculators' inference precision causes a sudden change in their sentiment, a speculative attack and the abandon of the parity.
2001-03
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24515/1/MPRA_paper_24515.pdf
Nabi, Mahmoud Sami (2001): Banking Performance and Speculative Attacks Under Asymmetric Information.
en
oai:mpra.ub.uni-muenchen.de:24530
2019-09-27T07:22:48Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463335
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24530/
The Dynamics of Spending and Absorption of Aid: Panel Data Analysis
Shonchoy, Abu
F34 - International Lending and Debt Problems
F35 - Foreign Aid
In September 1999, the International Monetary Fund (IMF) established the Poverty Reduction and Growth Facility (PRGF) to make the reduction of poverty and the enhancement of economic growth the fundamental objectives of lending operations in its poorest member countries. This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use of aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. The paper shows that PRGF-supported programs permit countries to utilize all increases in aid within a few years, showing smoothed use of aid inflows over time. Our results reveal that spending is higher than absorption in both the long-run and short-run use of aid, which is a robust finding of the study. Furthermore, the paper demonstrates that the long-run spending exceeds the injected increase of aid inflows in the economy. In addition, the paper finds that the presence of a PRGF-supported program does not influence the actual absorption or spending of aid.
2010-08-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24530/1/MPRA_paper_24530.pdf
Shonchoy, Abu (2010): The Dynamics of Spending and Absorption of Aid: Panel Data Analysis.
en
oai:mpra.ub.uni-muenchen.de:24577
2019-09-27T19:34:13Z
7374617475733D707562
7375626A656374733D46:4633:463337
7375626A656374733D46:4634
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4633
7375626A656374733D46:4633:463331
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24577/
Early Warning System: Empirical Results from The Signals Approach
Reinhart, Carmen
Goldstein, Morris
Kaminsky, Graciela
F37 - International Finance Forecasting and Simulation: Models and Applications
F4 - Macroeconomic Aspects of International Trade and Finance
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F3 - International Finance
F31 - Foreign Exchange
F36 - Financial Aspects of Economic Integration
The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the robustness of their results as to the individual performance of the indicators. In particular, the sample size has been expanded by including 26 years worth of data for an additional five countries. Second, we examine the performance of many of the indicators that have been stressed in the financial press surrounding the coverage of the Asian crises, including both conventional indicators, such as the current account deficit, as well as indicators which stress the composition of international capital flows.
2000
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24577/1/MPRA_paper_24577.pdf
Reinhart, Carmen and Goldstein, Morris and Kaminsky, Graciela (2000): Early Warning System: Empirical Results from The Signals Approach. Published in: Assessing Financial Vulnerability: An Early Warning System for Emerging Markets , Institute for International Economics (2000)
en
oai:mpra.ub.uni-muenchen.de:24578
2019-09-29T09:52:42Z
7374617475733D707562
7375626A656374733D46:4634
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4633
7375626A656374733D46:4633:463331
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24578/
Rating the Rating Agencies
Reinhart, Carmen
Goldstein, Morris
Kaminsky, Graciela
F4 - Macroeconomic Aspects of International Trade and Finance
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F3 - International Finance
F31 - Foreign Exchange
F36 - Financial Aspects of Economic Integration
In this study, we begin by assessing the ability of sovereign credit ratings to anticipate crises. In addition, given the wave of sovereign credit ratings downgrades that have followed the crises in Asia, we investigate formally the extent to which credit ratings are reactive. Along the way, we discuss a small but growing literature that examines to what extent financial markets anticipate crises.
2000
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24578/1/MPRA_paper_24578.pdf
Reinhart, Carmen and Goldstein, Morris and Kaminsky, Graciela (2000): Rating the Rating Agencies. Published in: Assessing Financial Vulnerability: An Early Warning System for Emerging Markets , Institute for International Economics (2000)
en
oai:mpra.ub.uni-muenchen.de:24579
2019-10-05T16:46:19Z
7374617475733D707562
7375626A656374733D46:4633:463337
7375626A656374733D46:4634
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4633:463331
7375626A656374733D46:4633:463333
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24579/
Early Warning System: An Assessment of Vulnerability
Reinhart, Carmen
Goldstein, Morris
Kaminsky, Graciela
F37 - International Finance Forecasting and Simulation: Models and Applications
F4 - Macroeconomic Aspects of International Trade and Finance
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F31 - Foreign Exchange
F33 - International Monetary Arrangements and Institutions
F36 - Financial Aspects of Economic Integration
Predicting the timing of currency and banking crises is likely to remain an elusive task for academics, financial market participants, and policymakers. Few foresaw the Asian crises and fewer still could have imagined their severity. However, recent events have highlighted the importance of improving upon a system of “early warnings.” The signals approach introduced in Kaminsky and Reinhart (1996) and applied to the out-of-sample data during January 1996- June 1997 in this section we illustrate how this approach can ne applied to glean where trouble spots may be brewing.
2000
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24579/1/MPRA_paper_24579.pdf
Reinhart, Carmen and Goldstein, Morris and Kaminsky, Graciela (2000): Early Warning System: An Assessment of Vulnerability. Published in: Assessing Financial Vulnerability: An Early Warning System for Emerging Markets, Institute for International Economics (2000)
en
oai:mpra.ub.uni-muenchen.de:24580
2019-09-30T00:40:58Z
7374617475733D707562
7375626A656374733D46:4633:463337
7375626A656374733D46:4634
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D46:4633:463331
7375626A656374733D46:4633:463333
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24580/
Some Policy Issues Regarding an Early Warning System
Reinhart, Carmen
Goldstein, Morris
Kaminsky, Graciela
F37 - International Finance Forecasting and Simulation: Models and Applications
F4 - Macroeconomic Aspects of International Trade and Finance
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
F31 - Foreign Exchange
F33 - International Monetary Arrangements and Institutions
F36 - Financial Aspects of Economic Integration
In focusing on the 24 month window prior to the onset of the crisis, the criteria for ranking the indicators presented in our related work does not distinguish between a signal given 12 months prior to the crisis and one given one month prior to the crisis. In what follows we examine this issue, by tabulating for each of the monthly indicators the average number of months in advance of the crisis when the first signal occurs; this, of course, does not preclude the fact that the indicator may continue to give signals through the entire period immediately preceding the crisis. Indeed, for the more reliable indicators signals tend to become increasingly persistent ahead of crises.
2000
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24580/1/MPRA_paper_24580.pdf
Reinhart, Carmen and Goldstein, Morris and Kaminsky, Graciela (2000): Some Policy Issues Regarding an Early Warning System. Published in: Assessing Financial Vulnerability: An Early Warning System for Emerging Markets (2000)
en
oai:mpra.ub.uni-muenchen.de:24851
2019-10-05T16:34:43Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D47:4733:473338
7375626A656374733D46:4631:463134
7375626A656374733D46:4632:463231
7375626A656374733D46:4634:463433
7375626A656374733D45:4532:453230
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/24851/
Deficitul de cont curent: Maladie cronică a economiei româneşti ?
Georgescu, George
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
G38 - Government Policy and Regulation
F14 - Empirical Studies of Trade
F21 - International Investment ; Long-Term Capital Movements
F43 - Economic Growth of Open Economies
E20 - General
The study is emphasizing the weak performances of the Romanian economy, unable to turn positive the current account deficits. On the contrary, because of rising problems in deficits financing through autonomous flows, the debt accumulation could lead Romania on the brink of entering a financial turmoil. The adverse impact of slowing IPT flows and the side effects of increasing FDI stock could bring more close the time horizon of this dramatic perspective. Even if the current account deficits persistently overcame the warning level (as % of GDP), it seems obvious that the Romanian governmental and monetary authorities have not been aware of the threats, not taken any action to address external imbalances, as policies focused on sound structural reforms and exports’ sustaining.
2007-05-20
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/24851/1/MPRA_paper_24851.pdf
Georgescu, George (2007): Deficitul de cont curent: Maladie cronică a economiei româneşti ? Published in: Revista Bilant No. 33 (20 June 2007): pp. 37-46.
ro
oai:mpra.ub.uni-muenchen.de:25270
2019-09-29T18:20:57Z
7374617475733D756E707562
7375626A656374733D47:4731:473132
7375626A656374733D46:4633:463334
7375626A656374733D47:4730:473031
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/25270/
The chicken or the egg? A note on the dynamic interrelation between government bond spreads and credit default swaps
Delis, Manthos D
Mylonidis, Nikolaos
G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates
F34 - International Lending and Debt Problems
G01 - Financial Crises
This note provides the first empirical assessment of the dynamic interrelation between government bond spreads and their associated credit default swaps (CDS). We use data for the Southern European countries (Greece, Italy, Portugal and Spain) that found themselves with a problematic public sector in the dawn of the recent financial distress. We find that CDS prices Granger-cause government bond spreads after the eruption of the 2007 subprime crisis. Feedback causality is detected during periods of financial and economic turmoil, thereby indicating that high risk aversion tends to perplex the transmission mechanism between CDS prices and government bond spreads.
2010-09-20
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/25270/1/MPRA_paper_25270.pdf
Delis, Manthos D and Mylonidis, Nikolaos (2010): The chicken or the egg? A note on the dynamic interrelation between government bond spreads and credit default swaps.
en
oai:mpra.ub.uni-muenchen.de:26319
2019-09-30T17:11:31Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D47:4733:473338
7375626A656374733D46:4632:463231
7375626A656374733D45:4532:453230
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/26319/
Parametrii macroeconomici în derivă
Georgescu, George
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
G38 - Government Policy and Regulation
F21 - International Investment ; Long-Term Capital Movements
E20 - General
The paper updates a warning launched by the author a year earlier regarding the effects of Inward/Outward Processing Trade flows, already entered a marginal decrease path. The high volatility of these flows, totally escaping the perception of decision makers, is threatening Romania’s appropriate management of the financial framework sustainability on medium and long term. In the first half of 2005, the economic parameters deteriorated in real terms more than shows the official data, as concerns net exports contribution to GDP, trade and current account balance, leading to the increase in external debt, which are endangering also the country risk rating, implicitly the costs of external borrowing in order to cover the rising financial gap.
2005-10-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/26319/1/MPRA_paper_26319.pdf
Georgescu, George (2005): Parametrii macroeconomici în derivă. Published in: Revista Bilant No. 13 (25 October 2005): pp. 15-19.
ro
oai:mpra.ub.uni-muenchen.de:26364
2019-09-30T16:37:58Z
7374617475733D707562
7375626A656374733D46:4631:463135
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463332
7375626A656374733D4F:4F32:4F3234
7375626A656374733D47:4731:473138
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/26364/
Evaluarea României: adevăr sau ficţiune?
Georgescu, George
F15 - Economic Integration
F34 - International Lending and Debt Problems
F32 - Current Account Adjustment ; Short-Term Capital Movements
O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy
G18 - Government Policy and Regulation
The paper focuses on the current system of country risk assessment by the main rating agencies, pointing out some of its weaknesses. Under these circumstances, was found that Romania is overrated by the international agencies, mainly due to political reasons, related to the close accession of the country into the European Union. The EU Member status does not however guarantee the financial stability, a possible rating downgrade - back to speculative grade - caused by the accelerated deterioration of trade and current account balances, making more expensive the increased borrowing costs to cover the deficits and threatening Romania’s external debt sustainability.
2006-11-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/26364/1/MPRA_paper_26364.pdf
Georgescu, George (2006): Evaluarea României: adevăr sau ficţiune? Published in: Revista Bilant No. 26 (28 November 2006): pp. 62-66.
ro
oai:mpra.ub.uni-muenchen.de:27536
2019-09-26T22:05:54Z
7374617475733D756E707562
7375626A656374733D46:4635:463530
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F35:4F3534
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/27536/
Should Argentina Be Welcomed Back by the Capital Markets?
Porzecanski, Arturo C.
F50 - General
F34 - International Lending and Debt Problems
O54 - Latin America ; Caribbean
The question of whether financial intermediaries and institutional investors in the U.S. and Europe should welcome Argentina back to the global capital markets is certainly relevant -- especially for those with short memories who may be tempted by the high yields on offer to rush in without a full understanding of the significant risks involved. At first sight, it would appear that Argentina has come a long way from its troubled past. However, it would be naïve to rush to the conclusion that Argentina is a creditworthy or relatively safe place in which to invest. To begin with, under both the late Néstor Kirchner and the current President Fernández-Kirchner, the government has spent its enormous revenue windfall, such that in fact there are hardly any extra fiscal resources available to support the existing –- or any new –- public indebtedness. Serious allegations have been made about the accuracy and integrity of official inflation data in Argentina, casting doubt on all kinds of economic indicators that use price indexes as a deflator. If inflation has indeed been running closer to 25% than to 10%, then the government's fiscal, monetary and exchange-rate policies are unsound and destabilizing. Moreover, key institutions of relevance to investors have been undermined by government actions, such as the national statistical agency (INDEC), the central bank, and the country's pension funds. The controversy over the true rate of inflation is part of a larger picture of lack of transparency in Argentina. The country is the only member of the G-20, and one of the very few in the world, that refuses to abide by its treaty obligations to the IMF, which include allowing the Fund to inspect its books and evaluate the country’s economic performance and policies -– especially its exchange-rate policies under the IMF's Article IV Consultation process. Argentina is also the only G-20 member government that is in default on its loan obligations to its fellow members -– and it has been in default to them for nearly a decade. An eventual restructuring of these debts by the Paris Club will likely force today's investors to have their own bonds restructured as well, given the Club’s principle of "comparable treatment." The country is the G-20 member with by far the most U.S. court judgments against it and the most investor claims and arbitral awards against it at ICSID, the world’s premier dispute-resolution center. Argentina is likewise the only G-20 member that has been put on probation by the Financial Action Task Force (FATF), an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. Many allegations of corruption have been made but never investigated, and the FATF highlights the impunity that prevails in Argentina. In sum, despite the allure of high yields, investors and financial intermediaries are well advised to approach Argentine fixed-income and equity investment and trading opportunities with extreme caution, because they embody substantial market and default risks.
2010-12-17
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/27536/1/MPRA_paper_27536.pdf
Porzecanski, Arturo C. (2010): Should Argentina Be Welcomed Back by the Capital Markets?
en
oai:mpra.ub.uni-muenchen.de:28110
2019-09-30T15:14:29Z
7374617475733D756E707562
7375626A656374733D4F:4F31:4F3131
7375626A656374733D46:4633:463334
7375626A656374733D46:4630:463032
7375626A656374733D46:4635:463539
7375626A656374733D46:4634:463433
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/28110/
Global imbalances: an unconventional view
Popov, Vladimir
O11 - Macroeconomic Analyses of Economic Development
F34 - International Lending and Debt Problems
F02 - International Economic Order and Integration
F59 - Other
F43 - Economic Growth of Open Economies
Maintaining today’s global imbalances would help to overcome the major disproportion of our times – income gap between developed and developing countries. This gap was
widening for 500 years and only now, in the recent 50 years, there are some signs that this gap is starting to decrease. The chances to close this gap sooner rather than later would be better, if the West would go into debt, allowing developing countries to have trade surpluses that would help them develop faster. Previously, in 16-20th century, it was the West that was developing faster, accumulating surpluses in trade with “the rest” and
using these surpluses to buy assets in developing countries, while “the rest” were going into debt. Now it is time for “the rest” to accumulate assets and for the West to go into debt.
2010-05
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/28110/1/MPRA_paper_28110.pdf
Popov, Vladimir (2010): Global imbalances: an unconventional view.
en
oai:mpra.ub.uni-muenchen.de:28236
2019-09-29T04:36:10Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/28236/
Asymmetric Shocks, Long-term Bonds and Sovereign Default
Zhu, Junjun
Xie, Shiyu
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
We present a sovereign default model with asymmetric shocks and long-term bonds, and solve the model using discrete state dynamic programming. As result, our model matches the Argentinean economy over period 1993Q1-2001Q4 quite well. We show that our model can match high default frequency, high debt/output ratio and other cyclical features, such as countercyclical interest rate and trade balance in emerging countries. Moreover, with asymmetric shocks we are able to match high sovereign spread level and low spread volatility simultaneously in one model, which is till now not well solved. As another contribution of our paper, we propose a simulation-based approach to approximate transition function of output shocks between finite states, which is an indispensable step in discrete state dynamic programming. Comparing to Tauchen’s method, our approach is very flexible in transforming various econometric models to finite state transition function, so that our approach can be widely used in simulating different kinds of discrete state shocks.
2011-01-18
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/28236/1/MPRA_paper_28236.pdf
Zhu, Junjun and Xie, Shiyu (2011): Asymmetric Shocks, Long-term Bonds and Sovereign Default.
en
oai:mpra.ub.uni-muenchen.de:28272
2019-09-30T17:01:07Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4630:463032
7375626A656374733D46:4633:463333
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/28272/
Mandato e Attività del Fondo Monetario Internazionale
Cafiso, Gianluca
F34 - International Lending and Debt Problems
F02 - International Economic Order and Integration
F33 - International Monetary Arrangements and Institutions
This paper explains the evolution of the International Monetary Fund’s mandate and discusses its role in supporting countries experiencing a macroeconomic crisis. We consider the conditionality attached to its loans and why it is convenient in some regards. Even though its operations and functioning raise many criticisms, we argue that the Fund is a necessary institution because it acts opposite to capital markets when it is necessary.
2002-12
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/28272/1/MPRA_paper_28272.pdf
Cafiso, Gianluca (2002): Mandato e Attività del Fondo Monetario Internazionale.
it
oai:mpra.ub.uni-muenchen.de:28341
2019-09-26T23:46:21Z
7374617475733D696E7072657373
7375626A656374733D46:4633:463334
7375626A656374733D46:4635
7375626A656374733D46:4633
7375626A656374733D46:4635:463531
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/28341/
When Bad Things Happen to Good Sovereign Debt Contracts: The Case of Ecuador
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F5 - International Relations, National Security, and International Political Economy
F3 - International Finance
F51 - International Conflicts ; Negotiations ; Sanctions
The lesson from abundant history is that, despite decades of constructive innovations in international loan and bond contracts involving sovereign financial obligations, lawyers, bankers, analysts and investors are best advised to operate under no illusions: Sovereigns are indeed sovereign. To those who harbored the hope that Argentina’s bad behavior as a sovereign debtor was a major exception that would not soon be repeated, the case of Ecuador’s latest default on shaky claims of the “illegitimacy” of some of its obligations demonstrates that while the absence of sovereign willingness to pay remains rare, it is not rare enough. These rogue sovereign debtors can be effectively restrained only by the forceful actions of other sovereigns, bilaterally or multilaterally, but in this case, in a repetition of attitudes shown toward Argentina since 2002, the international official community not only failed to condemn Ecuador’s actions, but actually expressed verbal and provided financial support. The government in Quito gathered no plaudits from the many national and international NGOs that have been campaigning for the massive forgiveness of developing-country debt, but at least this attitude is understandable: the case of Ecuador did not lend itself to arguments in favor of repudiation on “odious debt” or any related grounds. Above all, the country provides a useful, cautionary tale of the bad things that can happen to good sovereign debt contracts.
2010-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/28341/1/MPRA_paper_28341.pdf
Porzecanski, Arturo C. (2010): When Bad Things Happen to Good Sovereign Debt Contracts: The Case of Ecuador. Forthcoming in: Law & Contemporary Problems No. Fall 2010
en
oai:mpra.ub.uni-muenchen.de:28342
2019-09-26T09:21:00Z
7374617475733D696E7072657373
7375626A656374733D46:4633:463334
7375626A656374733D46:4633:463330
7375626A656374733D4F:4F35:4F3534
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/28342/
Should Argentina Be Welcomed Back by the Capital Markets?
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F30 - General
O54 - Latin America ; Caribbean
Argentina has been making its way back to the international capital markets after being shunned for almost a decade following a catastrophic default and devaluation. The question of whether financial intermediaries and institutional investors in the U.S. and Europe should welcome Argentina back to the global capital markets is certainly relevant –- especially for those with short memories who may be tempted by the high yields on offer to rush in without a full understanding of the significant risks involved. At first sight, it would appear that Argentina has come a long way from its troubled past: it has recorded major gains in real GDP, employment growth, and various financial ratios that usually buttress creditworthiness (e.g., tax revenues, export earnings and international reserves). However, it would be naïve to rush to the conclusion that Argentina is a creditworthy or relatively safe place in which to invest. Notwithstanding an impressive economic recovery, the country’s ability to service its financial obligations remains quite limited, and the government’s attitude toward official and private creditors, as well as toward court judgments and arbitral awards, remains one of contempt. The country is ranked uniformly low in various measures of the business climate, competitiveness, transparency, corruption and economic liberty. Therefore, Argentina –- including its sovereign, sub-sovereign and most corporate issuers –- is classified correctly as a very risky, single-B credit by the leading rating agencies. Indeed, the country remains an outlier in the community of nations. It is the only nation in the G-20 group of countries that is in protracted default on its financial obligations to its fellow members. It is the only country in the G-20 that refuses to abide by its treaty obligations to the International Monetary Fund. It is the only member of the G-20 to have received a "thumbs down" from the leading governmental organization that sets and monitors standards to combat transnational financial crimes. And it is the G-20 member with by far the most investor claims against it in the world’s premier dispute resolution center.
2010-12-17
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/28342/1/MPRA_paper_28342.pdf
Porzecanski, Arturo C. (2010): Should Argentina Be Welcomed Back by the Capital Markets? Forthcoming in: University of Miami Center for Hemispheric Policy Perspectives on the Americas
en
oai:mpra.ub.uni-muenchen.de:31455
2019-10-07T15:09:13Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D47:4731:473135
7375626A656374733D43:4332:433233
7375626A656374733D4E:4E32:4E3235
7375626A656374733D46:4633:463336
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/31455/
Cross-border bank lending to selected SEACEN economies: an integrative report
Pontines, Victor
Siregar, Reza Yamora
F34 - International Lending and Debt Problems
G15 - International Financial Markets
C23 - Panel Data Models ; Spatio-temporal Models
N25 - Asia including Middle East
F36 - Financial Aspects of Economic Integration
This study seeks to address a number of rising policy concerns from the aftermath of the recent subprime crisis. Did foreign bank lending decline sharply and transmit the financial shocks from the advanced economies to the SEACEN emerging markets? Was the decline driven by the drying-up in supply of cross-border loans or more by the sharp decline in the demand for this funding? Does greater exposure of foreign banks to a host country lowered the sensitivity of its claims to shocks originating from their own economies? Do bank claims to a country affected by
the aggregate changes in claims to another country? How about the stability of these flows? In short, this study aims to ascertain the various multi-faceted aspects of this international bank lending.
2011-06-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/31455/1/MPRA_paper_31455.pdf
Pontines, Victor and Siregar, Reza Yamora (2011): Cross-border bank lending to selected SEACEN economies: an integrative report.
en
oai:mpra.ub.uni-muenchen.de:33408
2019-09-28T02:42:23Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D47:4732:473234
7375626A656374733D47:4730:473031
7375626A656374733D46:4634:463432
7375626A656374733D45:4536:453636
7375626A656374733D43:4336:433635
7375626A656374733D45:4535:453538
7375626A656374733D47:4731:473138
7375626A656374733D47:4731:473135
7375626A656374733D45:4535:453532
7375626A656374733D47:4732:473238
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/33408/
All Things Considered: The Interaction of the Reasons for the Financial Crisis
Abdala Rioja, Yamile E
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies
G01 - Financial Crises
F42 - International Policy Coordination and Transmission
E66 - General Outlook and Conditions
C65 - Miscellaneous Mathematical Tools
E58 - Central Banks and Their Policies
G18 - Government Policy and Regulation
G15 - International Financial Markets
E52 - Monetary Policy
G28 - Government Policy and Regulation
The present paper reviews the causes that led to the financial crisis. Unlike other interpretations, this paper does not place main significance on a single source or on a set of causes. I consider all major standpoints highlighted by research and media prior, during and after the financial market turmoil in 2007. When evidence permits, reasons are validated and their potential consequences are reviewed by means of reductio ad absurdum, specifically by proof by contradiction. This analysis proposes arguments that are in favor and against a specific source whenever applicable, so as to address each cause’s major implications and deterrents. Ultimately, this analysis reveals through graph theory the interconnections among the analyzed sources for the crisis and their forbearance as a cluster that projected the final downturn.
2011-09-13
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/33408/1/MPRA_paper_33408.pdf
Abdala Rioja, Yamile E (2011): All Things Considered: The Interaction of the Reasons for the Financial Crisis.
en
oai:mpra.ub.uni-muenchen.de:33441
2019-09-28T19:18:50Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D47:4732:473234
7375626A656374733D47:4730:473031
7375626A656374733D46:4634:463432
7375626A656374733D45:4536:453636
7375626A656374733D43:4336:433635
7375626A656374733D45:4535:453538
7375626A656374733D47:4731:473138
7375626A656374733D47:4731:473135
7375626A656374733D45:4535:453532
7375626A656374733D47:4732:473238
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/33441/
All things considered: the interaction of the reasons for the financial crisis
Abdala Rioja, Yamile E
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies
G01 - Financial Crises
F42 - International Policy Coordination and Transmission
E66 - General Outlook and Conditions
C65 - Miscellaneous Mathematical Tools
E58 - Central Banks and Their Policies
G18 - Government Policy and Regulation
G15 - International Financial Markets
E52 - Monetary Policy
G28 - Government Policy and Regulation
The present paper reviews the causes that led to the financial crisis. Unlike other interpretations, this paper does not place main significance on a single source or on a set of causes. I consider all major standpoints highlighted by research and media prior, during and after the financial market turmoil in 2007. When evidence permits, reasons are validated and their potential consequences are reviewed by means of reductio ad absurdum, specifically by proof by contradiction. This analysis proposes arguments that are in favor and against a specific source whenever applicable, so as to address each cause’s major implications and deterrents. Ultimately, this analysis reveals through graph theory the interconnections among the analyzed sources for the crisis and their forbearance as a cluster that projected the final downturn.
2011-09-13
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/33441/1/MPRA_paper_33441.pdf
Abdala Rioja, Yamile E (2011): All things considered: the interaction of the reasons for the financial crisis.
en
oai:mpra.ub.uni-muenchen.de:33528
2019-09-27T19:32:26Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D48:4836:483633
7375626A656374733D45:4536:453630
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/33528/
Avro Bölgesi Ülkelerindeki Güncel Borç Krizi
Kibritçioğlu, Aykut
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
H63 - Debt ; Debt Management ; Sovereign Debt
E60 - General
The sovereign debt crisis that deepened within the last three years in particular Eurozone countries makes up one of the major components of the current global economic crisis (2006-2011) which were briefly described in Kibritçioğlu (2011). In this follow-up study, the historical and political origins of the debt crisis in EU countries, such as Ireland, Greece and Portugal, are analyzed with particular reference to the academic discussions during the final forming process of the European Monetary Union and the introduction of the euro as a single currency in the late 1990s. Finally, the study also focuses on EU's (possible/remaining) policy options to solve the ongoing debt crisis.
2011-08-16
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/33528/1/MPRA_paper_33528.pdf
Kibritçioğlu, Aykut (2011): Avro Bölgesi Ülkelerindeki Güncel Borç Krizi. Published in: İktisat ve Toplum Dergisi No. 10 (25 August 2011): pp. 30-41.
tr
oai:mpra.ub.uni-muenchen.de:35174
2019-10-06T01:19:12Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B32:4B3232
7375626A656374733D45:4534:453434
7375626A656374733D46:4632:463231
7375626A656374733D47:4733:473333
7375626A656374733D4E:4E32:4E3236
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/35174/
Mexico's retrogression: implications of a bankruptcy reorganization gone wrong
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
K22 - Business and Securities Law
E44 - Financial Markets and the Macroeconomy
F21 - International Investment ; Long-Term Capital Movements
G33 - Bankruptcy ; Liquidation
N26 - Latin America ; Caribbean
Mexico is retrogressing, becoming an unpredictable and risky jurisdiction for the adjudication of legitimate claims involving domestic and international lenders and investors. This conclusion follows from an analysis of the precedent-setting corporate workout involving a major Mexican multinational (Vitro) now winding its way through the Mexican courts. It raises serious doubts about the capacity of that country’s insolvency regime to deliver an outcome viewed as fair and consistent with prevailing norms and practices in the United States and other reputable jurisdictions. The case may well have a chilling effect on the easy access to foreign financing that Mexican corporations have enjoyed during recent years. The Vitro case has the potential to complicate even U.S.-Mexico diplomatic relations.
2011-11-14
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/35174/1/MPRA_paper_35174.pdf
Porzecanski, Arturo C. (2011): Mexico's retrogression: implications of a bankruptcy reorganization gone wrong.
en
oai:mpra.ub.uni-muenchen.de:35328
2019-10-16T17:26:36Z
7374617475733D756E707562
7375626A656374733D46:4631:463135
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D46:4633:463336
7375626A656374733D47:4730:473031
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/35328/
The Euro Area sovereign debt crisis: Some implications of its systemic dimension
Pessoa, Argentino
F15 - Economic Integration
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
F36 - Financial Aspects of Economic Integration
G01 - Financial Crises
After the beginning of the euro area, countries in its periphery engaged in weighty borrowing from foreign private investors, allowing domestic spending to outpace incomes. Now, these countries face debt crises reflecting a loss of creditor confidence in the sustainability of their finances from which results an abrupt end in private foreign lending to these economies. The debt crisis made evident the asymmetry between core and periphery countries, which is visible in trends in saving, consumption and investment. These divergent patterns have contributed to view the debt crisis as a problem of the PIIGS (Portugal, Ireland, Italy, Greece, Spain) that can be contained in the periphery, or as a new version of the fable of the Grasshopper and the Ant. We dispute this reductionism showing that the debt crisis is systemic and its solution cannot be found with more fiscal rules and austerity in peripheral countries alone. It will imply, if not an increase in fiscal and political integration, at least a higher coordination at the political and economic front and a new governance structure.
2011-12-10
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/35328/1/MPRA_paper_35328.pdf
Pessoa, Argentino (2011): The Euro Area sovereign debt crisis: Some implications of its systemic dimension.
en
oai:mpra.ub.uni-muenchen.de:35331
2019-10-02T19:24:08Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B33:4B3333
7375626A656374733D4B:4B31:4B3132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/35331/
Individual enforcement rights in international sovereign bonds
Häseler, Sönke
F34 - International Lending and Debt Problems
K33 - International Law
K12 - Contract Law
Sovereign bond contracts are notoriously hard to enforce. The few rights that bondholders have can be vested either collectively or individually. It seems that investors traditionally had a preference for the latter, which hindered financial market reform projects, such as the universal adoption of collective action clauses or trust structures.
This paper discusses theoretically and empirically whether it is indeed in the bondholders’ collective interest to be allowed to individually sue and attach the debtor country’s assets following a default. Market reaction to the landmark case of Elliott Associates v. Peru is tested to assess just how much bondholders actually value individual enforcement rights. It is found that even the single most important
event to reinforce creditor rights in recent years provoked no systematic movement in bond prices. We thus conclude that perhaps the importance of individual enforcement rights to the markets has been exaggerated and we therefore recommend ignoring any opposition from market participants that may arise during the necessary transition to more collective enforcement rights.
2011-05-01
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/35331/1/MPRA_paper_35331.pdf
Häseler, Sönke (2011): Individual enforcement rights in international sovereign bonds.
en
oai:mpra.ub.uni-muenchen.de:35332
2019-09-27T21:28:40Z
7374617475733D707562
7375626A656374733D4B:4B33:4B3333
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B31:4B3132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/35332/
Trustees versus fiscal agents and default risk in international sovereign bonds
Häseler, Sönke
K33 - International Law
F34 - International Lending and Debt Problems
K12 - Contract Law
Over the last ten years, organisations such as the IMF have launched several initiatives to change market practice with respect to sovereign bond contract drafting to ease restructuring after defaults. The first of
these, the universal adoption of collective action clauses, was embraced by the market after some hesitation. Another proposal - the more widespread appointment of trustees to represent bondholders in
times of crisis, to centralise enforcement action against the debtor and thus to facilitate debt relief - has so far failed to have the desired impact. Amongst other potential reasons for this failure, the argument has
been made that to vest enforcement rights in the trustee, as opposed to individual bondholder rights, would be to reduce the deterrence against opportunistic defaults and thus to exacerbate moral hazard.
Using a sample of secondary market bond spreads and information on default status, this paper assesses empirically whether sovereign bonds issued under a trust structure indeed carry a higher default risk. It
finds no systematic evidence of either a spread premium or higher actual default rates for bonds with collective enforcement rights.
2010-12-23
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/35332/1/MPRA_paper_35332.pdf
Häseler, Sönke (2010): Trustees versus fiscal agents and default risk in international sovereign bonds. Published in: European Journal of Law and Economics
en
oai:mpra.ub.uni-muenchen.de:35333
2019-10-03T05:57:01Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B33:4B3333
7375626A656374733D4B:4B31:4B3132
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/35333/
Collective action clauses in sovereign bonds
Häseler, Sönke
F34 - International Lending and Debt Problems
K33 - International Law
K12 - Contract Law
The universal adoption of collective action clauses (CACs) was the most promising reform proposal in recent debates on sovereign debt crisis management. Academics and the public sector
had been promoting CACs since 1995, yet market practice did not begin to change until 2003. This delay is often attributed to the opposition of investors and sovereign borrowers to CACs.
This article evaluates the publicly stated as well as the suspected private motives of the two sides to block the spread of CACs. It draws on a wide range of existing evidence and adds some new theoretical considerations to show that there is no reason to be sceptical of CACs unless bailouts exist as an alternative crisis resolution mechanism. This conclusion may be of interest purely for the sake of historical accuracy. But more importantly, it may help to better understand and to assess any potential future resistance from market participants, e.g. in the process of introducing CACs in bonds governed by German law.
2011
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/35333/1/MPRA_paper_35333.pdf
Häseler, Sönke (2011): Collective action clauses in sovereign bonds. Published in: Sovereign Debt: From Safety to Default
en
oai:mpra.ub.uni-muenchen.de:37057
2019-10-02T08:14:47Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D45:4534:453434
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/37057/
Default risk and risk averse international investors
Lizarazo, Sandra
F34 - International Lending and Debt Problems
E44 - Financial Markets and the Macroeconomy
F41 - Open Economy Macroeconomics
This paper develops a model of debt and default for small open economies that interact with risk averse international investors. The model developed here extends the recent work on the analysis of endogenous default risk to the case in which international investors are risk averse agents with decreasing absolute risk aversion (DARA). By incorporating risk averse investors who trade with an emerging economy, the present model explains a larger proportion and volatility of the spread between sovereign bonds and riskless assets than the standard model with risk neutral investors. The paper shows that if investors have DARA preferences, then the emerging economy's default risk, capital flows, and bond prices are a function not only of the fundamentals of the economy but also of the level of financial wealth and risk aversion of international investors. In particular, as investors become wealthier or less risk averse, the emerging economy becomes less credit constrained. As a result, the emerging economy's default risk is lower, and its bond prices and capital inflows are higher. Additionally, with risk averse investors, the risk premium in the asset prices of the sovereign countries can be decomposed into two components: a base premium that compensates the investors for the probability of default and an ``excess'' premium that compensates them for taking the risk of default.
2011-08-18
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/37057/1/MPRA_paper_37057.pdf
Lizarazo, Sandra (2011): Default risk and risk averse international investors.
en
oai:mpra.ub.uni-muenchen.de:37874
2019-09-28T12:32:53Z
7374617475733D696E7072657373
7375626A656374733D46:4633:463334
7375626A656374733D46:4632:463231
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/37874/
Buenos Aires to Athens: The Road to Perdition
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
F21 - International Investment ; Long-Term Capital Movements
F41 - Open Economy Macroeconomics
Three sovereign defaults in the past decade have each inflicted losses of at least 70% on bondholders: Argentina, Ecuador, and now Greece. In each case, creditor rights and the rule of law were trampled, setting troubling precedents that are worrying investors involved in vulnerable European countries. In Argentina (in default since 2002), numerous arbitrary measures were taken that damaged the interests of investors; the debt relief that was demanded bore little relation to the country's capacity to pay; and court judgments and arbitral awards against the sovereign have been routinely ignored. Ecuador (2008-2009) stands as the clearest example of sovereign unwillingness to pay. Investors were blindsided, bullied, and then sacrificed as part of a personal and ideological vendetta on President Correa's part. Investor confidence in Greece was destroyed by persistently negative attitudes coming out of Berlin. The huge losses imposed on creditors were based on questionable estimates and judgments, and various troubling, expedient means were used to achieve the dubious ends. Chances are that the road to perdition for investors will soon be extended to some other capital in Europe.
2012-04-02
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/37874/1/MPRA_paper_37874.pdf
Porzecanski, Arturo C. (2012): Buenos Aires to Athens: The Road to Perdition. Forthcoming in:
en
oai:mpra.ub.uni-muenchen.de:37942
2019-09-29T23:03:13Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D46:4631:463134
7375626A656374733D46:4633:463333
7375626A656374733D46:4634:463433
7375626A656374733D46:4634:463430
7375626A656374733D46:4634:463432
7375626A656374733D45:4533:453332
7375626A656374733D46:4634:463431
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/37942/
The economic and monetary union countries vs. the global crisis
Kowalski, Tadeusz
F34 - International Lending and Debt Problems
F14 - Empirical Studies of Trade
F33 - International Monetary Arrangements and Institutions
F43 - Economic Growth of Open Economies
F40 - General
F42 - International Policy Coordination and Transmission
E32 - Business Fluctuations ; Cycles
F41 - Open Economy Macroeconomics
The global financial and economic crisis revealed institutional weaknesses and structural problems of particular Economic and Monetary Union (EMU) countries.
The crisis and slowdown that followed had an impact on their relative competitiveness. Financial and economic turbulences of recent years shed new light on
the scale and scope of interdependences in the world economy. They uncovered economic and institutional flaws of the very EMU itself. The paper focuses on EMU countries real sector reactions to the financial disturbances. Both comparative static and dynamic approaches are used in order to assess the scope and pace of adjustments triggered by the global crisis.
2012-02-14
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/37942/1/MPRA_paper_37942.pdf
Kowalski, Tadeusz (2012): The economic and monetary union countries vs. the global crisis. Published in: Working papers. Faculty of international business and economics. Poznan University of Economics No. WP/2012/04
en
oai:mpra.ub.uni-muenchen.de:39031
2019-09-27T18:24:38Z
7374617475733D696E7072657373
7375626A656374733D4F:4F34:4F3437
7375626A656374733D46:4633:463334
7375626A656374733D4F:4F35:4F3537
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/39031/
External debt, trade and FDI on economic growth of least developed countries
Wamboye, Evelyn
O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence
F34 - International Lending and Debt Problems
O57 - Comparative Studies of Countries
This study evaluates the impact of public external debt on long term economic growth of forty least developed countries (LDCs). Arellano-Bond SGMM method is used on unbalanced panel data spanning from 1975 to 2010. A comparative analysis based on different debt specifications and samples is provided. Overall, our findings suggest that high external debt depresses economic growth, regardless of the nature of the debt. Furthermore, debt relief initiatives are crucial as evidenced in the lower negative debt effects on growth in HIPCs sub-sample relative to non-HIPCs. Additionally, trade, initial values of FDI and ODA matter in economic growth of LDCs.
2012-05-23
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/39031/1/MPRA_paper_39031.pdf
Wamboye, Evelyn (2012): External debt, trade and FDI on economic growth of least developed countries. Forthcoming in:
en
oai:mpra.ub.uni-muenchen.de:39238
2019-09-27T05:57:08Z
7374617475733D707562
7375626A656374733D46:4633:463334
7375626A656374733D48:4835:483530
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/39238/
The external debt-servicing constraint and public-expenditure composition in sub-Saharan Africa
Fosu, Augustin
F34 - International Lending and Debt Problems
H50 - General
In the light of the current global financial and economic crises, how would governments in sub-Saharan Africa (SSA) allocate their budgets across sectors in response to a binding debt-servicing constraint? Within a framework of public-expenditure choice, the present paper estimates constraint-consistent debt-service ratios and employs them in Seemingly Unrelated Regression involving five-year panel for up to 35 African countries over 1975-94, a period preceding the Highly Indebted Poor Countries (HIPC) initiatives. While observed debt service is found to be a poor predictor of expenditure allocation, constraining debt servicing shifts spending away from the social sector, with similar impacts on education and health. The implied partial elasticity of the sector’s expenditure share with respect to debt is estimated at 1.5, the highest responsiveness by far among all the explanatory variables considered, including external aid. Thus, if the social sector is to be protected, sufficient debt relief for SSA countries should be pursued.
2010
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/39238/1/MPRA_paper_39238.pdf
Fosu, Augustin (2010): The external debt-servicing constraint and public-expenditure composition in sub-Saharan Africa. Published in: African Development Review , Vol. 22, No. 3 (2010): pp. 378-393.
en
oai:mpra.ub.uni-muenchen.de:39482
2019-10-03T04:46:51Z
7374617475733D756E707562
7375626A656374733D45:4536:453632
7375626A656374733D46:4633:463334
7375626A656374733D48:4836:483633
7375626A656374733D4F:4F34:4F3430
7375626A656374733D46:4633:463336
7375626A656374733D48:4836:483631
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/39482/
La crescita in Italia dopo l’euro: quali riforme?
Schilirò, Daniele
E62 - Fiscal Policy
F34 - International Lending and Debt Problems
H63 - Debt ; Debt Management ; Sovereign Debt
O40 - General
F36 - Financial Aspects of Economic Integration
H61 - Budget ; Budget Systems
In Italy the rate of growth of GDP has declined over the period 2000-2006, after joining the single currency. The decrease is not incidental, but it has a structural and long-term nature, so this decrease relates to the potential growth. This weakening of growth takes place in an international economic context in which globalization has increased competitive pressures in product markets, capital markets, but also in the labor market. Italy still needs some structural reforms to become a full member in Europe.
The present paper examines and discusses some arguments regarding the causes of the low growth of the Italian economy after joining the single currency and focuses on the possible structural reforms affecting the labor market, taxation, the expansion of supply factors with the relative issues concerning the role of the state, privatization and liberalization.
2007-12
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/39482/1/MPRA_paper_39482.pdf
Schilirò, Daniele (2007): La crescita in Italia dopo l’euro: quali riforme?
it
oai:mpra.ub.uni-muenchen.de:39670
2019-09-26T23:09:01Z
7374617475733D756E707562
7375626A656374733D46:4633:463334
7375626A656374733D4B:4B32:4B3232
7375626A656374733D45:4534:453434
7375626A656374733D46:4632:463231
7375626A656374733D47:4733:473333
7375626A656374733D4E:4E32:4E3236
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/39670/
Mexico's retrogression: implications of a bankruptcy reorganization gone wrong
Porzecanski, Arturo C.
F34 - International Lending and Debt Problems
K22 - Business and Securities Law
E44 - Financial Markets and the Macroeconomy
F21 - International Investment ; Long-Term Capital Movements
G33 - Bankruptcy ; Liquidation
N26 - Latin America ; Caribbean
Mexico is retrogressing, becoming an unpredictable and risky jurisdiction for the adjudication of legitimate claims involving domestic and international lenders and investors. This conclusion follows from an analysis of the precedent-setting corporate workout involving a major Mexican multinational (Vitro) now winding its way through the Mexican courts. It raises serious doubts about the capacity of that country’s insolvency regime to deliver an outcome viewed as fair and consistent with prevailing norms and practices in the United States and other reputable jurisdictions. The case may well have a chilling effect on the easy access to foreign financing that Mexican corporations have enjoyed during recent years. The Vitro case has the potential to complicate even U.S.-Mexico diplomatic relations.
2011-11-14
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/39670/1/MPRA_paper_39670.pdf
Porzecanski, Arturo C. (2011): Mexico's retrogression: implications of a bankruptcy reorganization gone wrong.
en
oai:mpra.ub.uni-muenchen.de:40260
2019-09-26T09:15:50Z
7374617475733D756E707562
7375626A656374733D45:4530:453032
7375626A656374733D46:4633:463335
7375626A656374733D46:4633:463334
7375626A656374733D46:4634:463433
7375626A656374733D45:4532:453230
74797065733D7061706572
https://mpra.ub.uni-muenchen.de/40260/
Foreign Aid, External Debt and Governance
Qayyum, Unbreen
Musleh ud, Din
Haider, Adnan
E02 - Institutions and the Macroeconomy
F35 - Foreign Aid
F34 - International Lending and Debt Problems
F43 - Economic Growth of Open Economies
E20 - General
This paper presents a theoretical model for governance. Specifically, the Ramsey-Cass-Koopman's growth model has been extended by incorporating governance in an open economy framework. Steady-state and short run analysis show that external debt and foreign aid do not affect the growth rate of consumption but have level impact on consumption. Foreign aid and governance encourage the economic growth but external debt creates a burden on the economy. Both Investment and saving are independent of external debt and thus the current account surplus. Foreign aid does not affect investment directly but it has a direct positive impact on the savings in the economy. Therefore, it is argued that improvements in the quality of governance will stimulate the output and consumption rapidly and it acts
like a catalyst.
2012-07-25
MPRA Paper
NonPeerReviewed
application/pdf
en
https://mpra.ub.uni-muenchen.de/40260/1/MPRA_paper_40260.pdf
Qayyum, Unbreen and Musleh ud, Din and Haider, Adnan (2012): Foreign Aid, External Debt and Governance.
en
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