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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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Fiscal commitment and sovereign default risk
TL;DR: In this paper, the interaction between fiscal commitment and sovereign default risk in a model with optimal taxation and government spending is studied, and it is shown that committing to an inflexible tax plan is counterproductive: the lack of contingency hurts the government's debt sustainability and reduces welfare.
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"When it rains, it pours": fiscal policy, credit constraints and business cycles in emerging and developed economies
TL;DR: The authors found that the response of emerging governments to output uctuations is similar to that of developed governments, however, emerging governments curtail spending in response to increases in the sovereign borrowing rate, which forces their consumption expenditure to act more procyclically.
Essays in sovereign default and international financial liberalization
TL;DR: Mousa et al. as mentioned in this paper developed a dynamic stochastic open economy model where default occurs in equilibrium to study the welfare impact of abandoning a fixed exchange rate regime before a sovereign default crisis.
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On Sovereign Credit Ratings and Pro-Cyclical Fiscal Policy
TL;DR: In this paper, a non-monotonic relation between the procyclicality of government consumption and sovereign risk scores has been found for 93 countries and for more than 30 years, panel data econometric analyses show that vulnerable countries are more constrained in borrowing during economic downturns and must reinforce fiscal disciplines to repay debts in recessions.
References
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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.
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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.