Open AccessPosted Content
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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Journal ArticleDOI
A General Equilibrium Model of Sovereign Default and Business Cycles
Enrique G. Mendoza,Vivian Z. Yue +1 more
TL;DR: In this paper, a general equilibrium model of both sovereign default and business cycles is proposed, which explains several features of cyclical dynamics around deraults, countercyclical spreads, high debt ratios and key business cycle moments.
Journal ArticleDOI
How is Tax Policy Conducted over the Business Cycle
Carlos A. Vegh,Guillermo Vuletin +1 more
TL;DR: In this article, the authors build a dataset on tax rates for 62 countries for the period 1960-2013 that comprises corporate income, personal income, and value-added tax rates and find that tax policy is a cyclical in industrial countries but mostly procyclical in developing countries.
Journal ArticleDOI
Heterogeneous borrowers in quantitative models of sovereign default
TL;DR: In this article, the authors extend the model used in recent quantitative studies of sovereign default, allowing policymakers of different types to stochastically alternate in power, and show that a default episode may be triggered by a change in the type of policymaker in office, and that such a default is likely to occur only if there is enough political stability and if policymakers encounter poor economic conditions.
Book ChapterDOI
What is a Sustainable Public Debt
TL;DR: In this article, the authors identify critical flaws in the traditional approach to evaluate debt sustainability, and examine three alternative approaches that provide useful econometric and model-simulation tools to analyze debt sustainability.
Journal ArticleDOI
Quantitative Properties of Sovereign Default Models: Solution Methods Matter
TL;DR: In this paper, the authors study the sovereign default model that has been used to account for the cyclical behavior of interest rates in emerging market economies and show that this method necessitates a large number of grid points to avoid generating spurious interestrate movements.
References
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Journal ArticleDOI
Sovereign default and debt renegotiation
TL;DR: In this paper, the authors developed a small open economy model to study sovereign default and debt renegotiation within a dynamic borrowing framework and found that both equilibrium debt recovery rates and sovereign bond prices decrease with the level of debt.
ReportDOI
Procyclical Fiscal Policy in Developing Countries: Truth or Fiction?
Ethan Ilzetzki,Carlos A. Vegh +1 more
TL;DR: This article found evidence that fiscal policy in developing countries is expansionary, a channel disregarded by the existing literature, lending empirical support to the notion that when "it rains, it pours."
Journal ArticleDOI
One reason countries pay their debts: renegotiation and international trade
TL;DR: In this paper, the effect of sovereign debt renegotiation on international trade has been studied and it is shown that such renegotiation is associated with an economically and statistically significant decline in bilateral trade between a debtor and its creditors.
Journal ArticleDOI
Sovereign borrowing by developing countries: What determines market access?
TL;DR: In this article, the authors examine the ability of governments from developing countries to access international credit markets using detailed data on sovereign bond issuances and public syndicated bank loans between 1980 and 2000, and find that the probability of market access is not influenced by a country's frequency of defaults, and that a default, if resolved quickly, does not reduce significantly the likelihood of tapping the markets.
Posted Content
Tax Base Variability and Procyclical Fiscal Policy
Ernesto Talvi,Carlos A. Vegh +1 more
TL;DR: This article found that in developing countries, government spending and taxes are highly procyclical (i.e., government spending rises and taxes fall during expansions, while the reverse is true in recessions) and developed an optimal policy model in which running budget surpluses is costly because they create pressures to increase public spending.