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Systemic sovereign risk: macroeconomic implications in the euro area

Bahaj, Saleem A. - London School of Economics (LSE) - 2014

What are the macroeconomic implications of changes in sovereign risk premia? In this paper, I use a novel identification strategy coupled with a new dataset for the Euro Area to answer this question. I show that exogenous innovations in sovereign risk premia were an important driver of the...

Persistent link: https://www.econbiz.de/10011126365

Political credit cycles: the case of the Euro zone

Fernández-Villaverde, Jesús; Garicano, Luis; Santos, … - London School of Economics (LSE) - 2013

We study the mechanisms through which the adoption of the Euro delayed, rather than advanced, economic reforms in the Euro zone periphery and led to the deterioration of important institutions in these countries. We show that the abandonment of the reform process and the institutional...

Persistent link: https://www.econbiz.de/10011126656

The financial resource curse

Benigno, Gianluca; Fornaro, Luca - London School of Economics (LSE) - 2013

This paper presents a model of financial resource curse, i.e. episodes of abundant access to foreign capital coupled with weak productivity growth. We study a two-sector, tradable and non-tradable, small open economy. The tradable sector is the engine of growth, and productivity growth is...

Persistent link: https://www.econbiz.de/10010746513

IMF concern for reputation and conditional lending failure: theory and empirics

Marchesi, Silvia; Sabani, Laura - London School of Economics (LSE) - 2005

One possible explanation for the unsatisfactory implementation of IMF conditionality has been attributed to the lack of credibility of the IMF threat of interrupting financial assistance in case of non compliance with the negotiated conditions. In this paper we suggest that such lack of...

Persistent link: https://www.econbiz.de/10010745315

Endogenous liquidity and contagion

Rahi, Rohit; Zigrand, Jean-Pierre - London School of Economics (LSE) - 2009

. Our model is well-suited to study the contagion-like eects of liquidity shocks. …

Persistent link: https://www.econbiz.de/10010884503

Financial contagion through capital connections: a model of the origin and spread of bank panics

Dasgupta, Amil - London School of Economics (LSE) - 2002

Financial contagion is modeled as an equilibrium phenomenon in a dynamic setting with incomplete information and … failure of a financial institution. We show that contagion is possible in the unique equilibrium of the economy and … of contagion risk. Our results suggest that when the probability of bank failure is low, maximal levels of interbank …

Persistent link: https://www.econbiz.de/10010884582

Equilibrium analysis, banking, contagion and financial fragility

Tsomocos, Dimitrios P. - London School of Economics (LSE) - 2003

for positive default levels in equilibrium. It also characterises contagion and financial fragility as an equilibrium …

Persistent link: https://www.econbiz.de/10010884714

Market quality and contagion in fragmented markets

Rahi, Rohit; Zigrand, Jean-Pierre - London School of Economics (LSE) - 2013

proxies. The model is especially well-suited to study the contagion-like effects of liquidity shocks. …

Persistent link: https://www.econbiz.de/10011171758

Designing target rules for international monetary policy cooperation

Benigno, Gianluca; Benigno, Pierpaolo - London School of Economics (LSE) - 2004

This study analyzes a two-country dynamic general equilibrium model with nominal rigidities, monopolistic competition and producer currency pricing. A quadratic approximation to the utility of the consumers is derived and assumed as the policy objective function of the policymakers. It is shown...

Persistent link: https://www.econbiz.de/10010928623

Gains from coordination in a multi-sector open economy : does it pay to be different?

Liu, Zheng; Pappa, Evi - London School of Economics (LSE) - 2005

This paper presents a new argument for international monetary policy coordination based on considerations of structural asymmetries across countries. In a two-country world with a traded and a non-traded sector in each country, optimal independent monetary policy cannot replicate the...

Persistent link: https://www.econbiz.de/10010928792