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Code and data files for "Fiscal Policy and Default Risk in Emerging Markets"
TLDR
In this article, all Matlab and C++ programs necessary to produce the results of the article were described and a spreadsheet with Mexican data was also provided, along with a spreadsheet containing Mexican data.Abstract:
All Matlab and C++ programs necessary to produce the results of the article. There is also a Excel spreadsheet with Mexican data.read more
Citations
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Signalling Fiscal Austerity
TL;DR: In this paper, the authors show that the incentive to signal creditworthiness through austerity increases when sovereign credit ratings are less informative, and that increased scal austerity is associated with episodes in which ratings are more informative.
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Labor Market Distortions under Sovereign Default Crises
TL;DR: In this article, the authors propose and evaluate two different explanations for these movements by linking the wedges to changes in labor taxes and in the cost of working capital and show that a labor wedge deteriorates substantially around swift reversals of current accounts or default episodes.
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Sovereign Default Risk, Fiscal Adjustment, and Debt Renegotiation
TL;DR: In this article, the effects of government capital accumulation on sovereign debt default risk and debt restructuring renegotiation outcomes when government has limited ability to extract revenues from households were studied, and the authors developed a quantitative dynamic stochastic general equilibrium model of sovereign default, debt renegotiation, and fiscal policies, where government chooses between the fiscal instruments of government consumption and government investment.
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Imperfect Financial Markets and the Cyclicality of Social Spending
TL;DR: In this article, the authors develop a link between frictions in international financial markets and fiscal procyclicality, showing that the cyclical correlation of social spending exhibits the biggest differences across countries.
References
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Journal ArticleDOI
On the Determination of the Public Debt
TL;DR: In this paper, a public debt theory is constructed in which the Ricardian invariance theorem is valid as a first-order proposition but where the dependence excess burden on the timing of taxation implies an optimal time path of debt issue.
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Debt with Potential Repudiation: Theoretical and Empirical Analysis
Jonathan Eaton,Mark Gersovitz +1 more
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The Voracity Effect
Aaron Tornell,Philip R. Lane +1 more
TL;DR: In this paper, the authors analyze an economy that lacks a strong legal-political institutional infrastructure and is populated by multiple powerful groups, and they show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks.
Journal ArticleDOI
The risk-free rate in heterogeneous-agent incomplete-insurance economies
TL;DR: In this paper, the authors construct an economy where agents experience uninsurable idiosyncratic endowment shocks and smooth consumption by holding a risk-free asset, and calibrate the economy and characterize equilibria computationally.
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Business Cycles in Emerging Economies:The Role of Interest Rates
TL;DR: In this paper, the empirical relation between the interest rates that emerging economies face in international capital markets and their business cycles was investigated, showing that interest rate shocks alone can explain 50% of output fluctuations and can generate business cycle patterns consistent with the regularities described above and with the major booms and recessions in Argentina in the last two decades.