Defaultable Debt, Interest Rates, and the Current Account
Mark Aguiar,Gita Gopinath +1 more
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This article developed a quantitative model of debt and default in a small open economy and used this model to match four empirical regularities regarding emerging markets: defaults occur in equilibrium, interest rates are countercyclical, net exports are counter cyclical, and interest rates and the current account are positively correlated.About:
This article is published in Journal of International Economics.The article was published on 2004-05-01 and is currently open access. It has received 551 citations till now. The article focuses on the topics: Sovereign default & Capital market.read more
Citations
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From Financial Crash to Debt Crisis
Carmen Reinhart,Kenneth Rogoff +1 more
TL;DR: In this paper, the authors developed historical time series on public debt, along with data on external debts, allow a deeper analysis of the debt cycles underlying serial debt and banking crises, and they test three related hypotheses at both world aggregate levels and on an individual country basis.
Journal ArticleDOI
Emerging Market Business Cycles: The Cycle is the Trend
Mark Aguiar,Gita Gopinath +1 more
TL;DR: The authors found that shocks to trend growth, rather than transitory fluctuations around a stable trend, are the primary source of fluctuations in emerging markets, and the key features of emerging market business cycles are consistent with this underlying income process in an otherwise standard equilibrium model.
Journal ArticleDOI
Default Risk and Income Fluctuations in Emerging Economies
TL;DR: This article developed a small open economy model to study default risk and its interaction with output, consumption, and foreign debt, which predicts that default incentives and interest rates are higher in recessions, as observed in the data.
Journal ArticleDOI
Inequality, Leverage, and Crises†
Michael Kumhof,Romain Ranciere +1 more
TL;DR: In this article, the authors studied how high leverage and crises can arise as a result of changes in the income distribution and presented a theoretical model where these features arise endogenously as a shift in bargaining powers over incomes.
Journal ArticleDOI
Defaultable Debt, Interest Rates and the Current Account
TL;DR: This article developed a quantitative model of debt and default in a small open economy and used this model to match four empirical regularities regarding emerging markets: defaults occur in equilibrium, interest rates are countercyclical, net exports are counter cyclical, and interest rates and the current account are positively correlated.
References
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Debt with Potential Repudiation: Theoretical and Empirical Analysis
Jonathan Eaton,Mark Gersovitz +1 more
Posted Content
Investment, Capacity Utilization and the Real Business Cycle
Jeremy Greenwood,Zvi Hercowitz +1 more
TL;DR: In this article, the authors adopt the Keynesian view that direct shocks to investment are important for business fluctuations, but incorporate them in a neo-classical framework where the rate of capital expenditure is fixed.
Book
Models of business cycles
TL;DR: In this article, the authors present a survey of the state-of-the-art methods to solve the problem of data aggregation in the context of data visualization. Section I. Section II. Section III. Section IV. Section V. Section VI. Section VII. Section VIII.
Posted Content
Foundations of International Macroeconomics
Maurice Obstfeld,Kenneth Rogoff +1 more
TL;DR: Foundations of International Macroeconomics as mentioned in this paper is an innovative text that offers the first integrative modern treatment of the core issues in open economy macroeconomics and finance, including intertemporal consumption and investment theory, government spending and budget deficits, finance theory and asset pricing, the implications of (and problems inherent in) international capital market integration, growth, inflation and seignorage, policy credibility, real and nominal exchange rate determination.
Journal ArticleDOI
Business Cycles in Emerging Economies: The Role of Interest Rates
TL;DR: In this paper, the authors present a model of a small open economy, where the real interest rate is decomposed in an international rate and a country risk component, and the model generates business cycles consistent with Argentine data.
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