Conventional estimates of the seigniorage-maximizing inflation rate often make use of the Cagan form, which implies a constant semielasticity of money demand with respect to inflation. This paper shows that the elasticity of substitution in transactions between money and bonds determines how the...

While a number of crises in emerging markets generated widespread contagion in financial markets during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might have become a feature of...

This paper analyzes large fiscal adjustment plans, defined on the basis of the envisaged reduction in the public debt or deficit, and it compares ex ante plans with ex post outcomes. The motivation for this novel approach is two-fold. First, useful lessons can be drawn not only from successes,...

Drawing on a newly-collected data set on bond yields, macroeconomic variables, and news of various categories for a panel of emerging markets, we provide the first comparative analysis of the determinants of sovereign bond spreads in the first era of financial globalization and bond finance...

We analyze yield spreads on sovereign bonds issued by emerging markets, using modern data from the 1990s and newly collected historical data on bonds traded in London during 1870-1913, a previous era of global capital market integration. We show that spreads today comove across emerging markets...