Modeling sudden stops: The non-trivial role of preference specifications

A puzzling ambiguity in current international economics literature is the link between sudden stops and output drops. While some studies predict the link, others find sudden stops lead to output increases. This paper theoretically shows that the ambiguity results from alternative preference specifications.

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Year of publication:	2009
Authors:	Chakraborty, Suparna
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 104.2009, 1, p. 1-4
Publisher:	Elsevier
Keywords:	Sudden stops General equilibrium Borrowing constraints Preference specifications Wealth effects

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005023453