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Code and data files for "Fiscal Policy and Default Risk in Emerging Markets"
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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
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MonographDOI
Stimulus vs. austerity vs. default
TL;DR: This article developed a dynamic stochastic quantitative model of sovereign default with fiscal policy, which captures the most salient features of the recent fiscal and debt situation in the Euro zone and highlighted the economic nature of the decision to default, the key role of official aid in avoiding such event and, thus, improving the overall economic outlook.
Essays in international and financial economics
TL;DR: In this article, the authors explore the relationship between default risk and income inequality, and extend the standard endogenous default model to allow for heterogeneous agents, finding that inequality shocks can increase the default risk significantly.
Posted Content
Sovereign defaults and optimal reserves management
TL;DR: The authors proposed a sovereign default model where the government decides jointly over the accumulation of long-duration bonds and foreign reserves, which can successfully explain the simultaneous holdings of debt and foreign reserve.
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Optimal fiscal adjustment and the commitment-to-forgive
TL;DR: In this article, the authors studied the incentives for fiscal adjustment for a debtor government under the risk of defaulting on its external debt and showed that the optimal tax rate set by the debtor is lower than the socially optimal.
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.
Journal ArticleDOI
Debt with Potential Repudiation: Theoretical and Empirical Analysis
Jonathan Eaton,Mark Gersovitz +1 more
Journal ArticleDOI
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.