Lim, Jamus Jerome (2007): Political Economic Pressures in Financial Crisis Resolution.
Download (729kB) | Preview
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.
|Item Type:||MPRA Paper|
|Institution:||The World Bank|
|Original Title:||Political Economic Pressures in Financial Crisis Resolution|
|Keywords:||Financial crisis; redistribution; special interest politics; IMF|
|Subjects:||F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
|Depositing User:||Jamus Lim|
|Date Deposited:||31. Oct 2007|
|Last Modified:||12. Mar 2015 16:54|