Popular perception is that emerging market economies (EMEs), and Asian Pacific Rim countries—China, Indonesia, Korea, Malaysia, Philippines, Thailand, and Vietnam (RIMs)—in particular, have been rapidly accumulating reserves, perhaps beyond what is justified by precautionary motives. This...

We examine how membership in a currency union affects public debt sustainability and market assessments of default risk in eurozone countries. We argue that there exist offsetting effects: expectations of bailouts tend to make a given level of debt more sustainable, lowering bond yields and CDS...

We test the hypothesis that net foreign asset positions are consistent with external solvency and examine the dynamics of external adjustment using data for 50 countries over the 1970–2006 period. Our analysis adapts Bohn's (2007) error-correction reaction function approach – which tests...