Theoretical Issues In International Borrowing
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Author | : Jeffrey D. Sachs |
Publisher | : |
Total Pages | : 54 |
Release | : 2008 |
Genre | : |
ISBN | : |
The current crisis in international lending points up a lesson re-learned several times in the past 150 years: the international loan markets function very differently from the textbook model of competitive lending. This paper discusses various extensions of the basic model.First, we amend the textbook model to show how limitations on a government'staxing authority may greatly affect its optimal borrowing strategy.Second, we explore the implications of adebtor country's option to repudiate debt.Third, we show that efficient lending may require collective actions by bank syndicates, and that a breakdown in collective action can result in serious inefficiencies and even financial panics.
Author | : Jeffrey Sachs |
Publisher | : |
Total Pages | : 60 |
Release | : 1984 |
Genre | : Business & Economics |
ISBN | : |
Author | : Michael Tomz |
Publisher | : Princeton University Press |
Total Pages | : 324 |
Release | : 2007-09-02 |
Genre | : Political Science |
ISBN | : 0691134693 |
Author | : Chris Czerkawski |
Publisher | : Springer Science & Business Media |
Total Pages | : 157 |
Release | : 2012-12-06 |
Genre | : Business & Economics |
ISBN | : 3642845495 |
The past approach to the international debt crisis has been traditionally based on conventional banking principle in which debt had to be paid back in fuH and in time. International lending was a function of the perceived credit standing of debtor country and the return on investment (ROI). If debtor country run into difficulties and had problems with service payments - it was generally assumed that the debt-related expenditures were mismanaged. With economic stability and firm financial rules - the debt crisis was supposed to disappear after application of appropriate adjustment measures. However in the world of inconsistent lending criteria greater uncertainty and increased volatility of expectations - the problem has continued to get worse. At the beginning of the 1990s a number of countries are more indebted than at any other time in the past. Until mid 1980s extern al debt economics has been rather a disembodied concept for most economists and business leaders. The main reason for this neglect of one of the most important macroeconomic categories was difficulty of distinguishing terminologically and methodologically the domestic determinants of national expenditures from the external ones. Then there were conceptual problems in distinguishing the functional determinants of macroeconomic liquidity from external and domestic determinants of macro-economic solvency. Moreover many studies of the debt crisis were one-sided. Usually debt was seen as a 'white-black' phenomenon with debtor countries accusing creditor countries for causing the crisis and vice versa.
Author | : Choeljoon Kang |
Publisher | : |
Total Pages | : 292 |
Release | : 1987 |
Genre | : Banks and banking, International |
ISBN | : |
Author | : M. Ayhan Kose |
Publisher | : World Bank Publications |
Total Pages | : 403 |
Release | : 2021-03-03 |
Genre | : Business & Economics |
ISBN | : 1464815453 |
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author | : Kaushik Basu |
Publisher | : Princeton Univ International Economics |
Total Pages | : 44 |
Release | : 1991-01-01 |
Genre | : Business & Economics |
ISBN | : 9780881652420 |
Author | : Piet Sercu |
Publisher | : Princeton University Press |
Total Pages | : 832 |
Release | : 2009-03-22 |
Genre | : Business & Economics |
ISBN | : 069113667X |
Focusing on international markets and multinational corporate finance, this book is the go-to resource for students seeking a complete understanding of the field.
Author | : Jonathan Eaton |
Publisher | : |
Total Pages | : 44 |
Release | : 1981 |
Genre | : Developing countries |
ISBN | : 9780881652185 |
Author | : Mr.Ayhan Kose |
Publisher | : International Monetary Fund |
Total Pages | : 68 |
Release | : 2003-09-03 |
Genre | : Business & Economics |
ISBN | : 9781589062214 |
This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.