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International lending of last resort and moral hazard:A model of IMF’s catalytic finance

Corsetti, Giancarlo; Guimarães, Bernardo; Roubini, Nouriel - European University Institute / Department of Economics; … - 2006

This paper analyzes the trade-off between official liquidity provision and debtor moral hazard ininternational financial crises. In the model, crises are caused by the interaction of bad fundamentals,self-fulfilling runs and policies by three classes of optimizing agents: international...

Persistent link: https://www.econbiz.de/10008911499

International Lending of Last Resort and Moral Hazard: A Model of IMF's Catalytic Finance

guimaraes, bernardo; Roubini, Nouriel; Corsetti, Giancarlo - National Bureau of Economic Research (NBER) - 2003

It is often argued that the provision of liquidity by the international institutions such as the IMF to countries … point out that official lending also causes moral hazard distortions: expecting to be bailed out by the IMF, debtor … three classes of optimizing agents: international investors, the local government and the IMF. We show how an international …

Persistent link: https://www.econbiz.de/10005774964

International Lending of Last Resort and Moral Hazard: A Model of the IMF's Catalytic Finance

Corsetti, Giancarlo; Guimarães, Bernardo; Roubini, Nouriel - C.E.P.R. Discussion Papers - 2004

The provision of liquidity by international institutions such as the IMF to countries experiencing balance of payment … problems could prevent liquidity runs but could also cause moral hazard distortions: expecting to be bailed out by the IMF … and policies by three classes of optimizing agents: international investors, the local government and the IMF. We show how …

Persistent link: https://www.econbiz.de/10005067528

What Caused the Asian Currency and Financial Crisis?

Corsetti, Giancarlo; Pesenti, Paolo; Roubini, Nouriel - Banca d'Italia - 1998

The paper explores the view that the Asian currency and financial crises in 1997 and 1998 reflected structural and policy distortions in the countries of the region, even though market overreaction and herding caused the plunge of exchange rates, asset prices and economic activity to be more...

Persistent link: https://www.econbiz.de/10005111544

International risk-sharing and the transmission of productivity shocks

Corsetti, Giancarlo; Dedola, Luca; Leduc, Sylvain - 2004

A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to effcient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that incomplete asset markets and a low price elasticity of tradables can account...

Persistent link: https://www.econbiz.de/10009636531

What Caused the Asian Currency and Financial Crisis? Part II: The Policy Debate

Pesenti, Paolo A.; Roubini, Nouriel; Corsetti, Giancarlo - National Bureau of Economic Research (NBER) - 1998

The paper explores the view that the Asian currency and financial crises in 1997 and 1998 reflected structural and policy distortions in the countries of the region, even if market overreaction and herding caused the plunge of exchange rates, asset prices, and economic activity to be more severe...

Persistent link: https://www.econbiz.de/10005830360

What Caused the Asian Currency and Financial Crisis? Part I: A Macroeconomic Overview

Pesenti, Paolo A.; Roubini, Nouriel; Corsetti, Giancarlo - National Bureau of Economic Research (NBER) - 1998

Persistent link: https://www.econbiz.de/10005830881

Options for the exchange rate policies in the EU accession countries (and other emerging market economies)

Bofinger, Peter; Wollmershäuser, Timo - Wirtschaftswissenschaftliche Fakultät, Bayerische … - 2000

We develop an institutional framework for central banks that try to pursue a stability-oriented monetary policy with the strategy of exchange rate targeting. Recent experience shows that a crucial element of this approach is to avoid destabilising capital inflows. Policy makers can exert...

Persistent link: https://www.econbiz.de/10009226050

Monetary policy and exchange rate targeting in open economies

Bofinger, Peter; Wollmershäuser, Timo - Wirtschaftswissenschaftliche Fakultät, Bayerische … - 2000

We develop an institutional framework for central banks that try to pursue a stability-oriented monetary policy in open-economies by directly targeting the exchange rate. Our main intention is to design a framework which avoids excessive capital inflows that can be regarded as a main cause of...

Persistent link: https://www.econbiz.de/10009226065

Arbitrage mechanism leading to currency crises: a theoretical perspective

Cavallari, Lilia; Corsetti, Giancarlo - Dipartimento di Economia e Diritto, Facoltà di Economia - 1997

In his seminal contribution on exchange rate crises, Krugman models speculative attacks as optimal market reactions to policy rules that are inconsistent with the indeâ€¦nite survival of a â€¦xed nominal parity. Later contributions have shifted the focus of the analysis, modelling...

Persistent link: https://www.econbiz.de/10009649858