Risk Allocation, Debt Fueled Expansion and Financial Crisis ∗ Paul Beaudry
... financial system that is very vulnerable. For this reason, we view our narrative as telling a cautionary tale. While the allocation of risk to those most willing to bear it has the potential of favoring economic activity, it can, at the same time, also render the system sensitive to small perturbati ...
... financial system that is very vulnerable. For this reason, we view our narrative as telling a cautionary tale. While the allocation of risk to those most willing to bear it has the potential of favoring economic activity, it can, at the same time, also render the system sensitive to small perturbati ...
Lowering risk and saving money
... FX risk is top-of-mind among management teams and market participants, given the notable strengthening of the USD and elevated FX volatility (Figure 2). The average negative EPS impact due to FX headwinds was 5 cents to 12 cents in recent quarters, versus the industry standard management objective o ...
... FX risk is top-of-mind among management teams and market participants, given the notable strengthening of the USD and elevated FX volatility (Figure 2). The average negative EPS impact due to FX headwinds was 5 cents to 12 cents in recent quarters, versus the industry standard management objective o ...
Long-Term Debt Management Plan
... As infrastructure ages, it periodically needs major (usually expensive) rehabilitation and ultimately needs to be replaced. Development charges cannot be used for this purpose, making it necessary to find other funding sources such as taxes and/or user rates. To minimize the impact that rehabilitati ...
... As infrastructure ages, it periodically needs major (usually expensive) rehabilitation and ultimately needs to be replaced. Development charges cannot be used for this purpose, making it necessary to find other funding sources such as taxes and/or user rates. To minimize the impact that rehabilitati ...
The Political Economy of Public Debt in Brazil
... This paper studies the behavior of public debt management in Brazil since the early eighties. Our focus is on the political economy aspects and the conflict of interest among the players directly or indirectly engaged in public debt policy in this country. Apart from introduction and concluding rema ...
... This paper studies the behavior of public debt management in Brazil since the early eighties. Our focus is on the political economy aspects and the conflict of interest among the players directly or indirectly engaged in public debt policy in this country. Apart from introduction and concluding rema ...
Lost and Found: Market Access and Public Debt Dynamics
... probability of debt distress compared to an opposite scenario with a 10 percentage points increase in the debt ratio over the same period. Identifying the conditions that facilitate regaining market access—once this has been lost—is also a very relevant topic, including in resolving public debt cris ...
... probability of debt distress compared to an opposite scenario with a 10 percentage points increase in the debt ratio over the same period. Identifying the conditions that facilitate regaining market access—once this has been lost—is also a very relevant topic, including in resolving public debt cris ...
Inside Debt and Corporate Investment
... claims in levered firms) promote risk taking, including investment in relatively risky projects. More recently, researchers have explored the relation between investment activity and “inside debt,” defined as unsecured long-term fixed claims (primarily defined-benefit pensions and deferred compensat ...
... claims in levered firms) promote risk taking, including investment in relatively risky projects. More recently, researchers have explored the relation between investment activity and “inside debt,” defined as unsecured long-term fixed claims (primarily defined-benefit pensions and deferred compensat ...
US Local Government General Obligation Debt
... perspective, there is an economic limit on the level of taxation that a municipality's tax base can bear. From a legal perspective, the local government's mandate to provide essential public services and pay retiree pensions may also have strong claims on a government’s revenue and taxing power, dep ...
... perspective, there is an economic limit on the level of taxation that a municipality's tax base can bear. From a legal perspective, the local government's mandate to provide essential public services and pay retiree pensions may also have strong claims on a government’s revenue and taxing power, dep ...
The Debt-Overhang Hypothesis and the Effects on Low/High Income
... From the past decades we can conclude that debt crises are something that happens regularly in the modern economy. The American savings and loans crisis of the 1980s happened at the same time as the LDCs started to default on their sovereign debt. Around the turn of the millennia Argentina plunged i ...
... From the past decades we can conclude that debt crises are something that happens regularly in the modern economy. The American savings and loans crisis of the 1980s happened at the same time as the LDCs started to default on their sovereign debt. Around the turn of the millennia Argentina plunged i ...
Ending over-lending: assessing systemic risk with - ECB
... viewpoint of systemic risk, the underlying problems relate to an endogenous build-up of widespread imbalances in one or several parts of a financial system, such as high concentrations of lending in certain sectors of the economy or more general credit booms in a nation. Minsky depicted the endogeno ...
... viewpoint of systemic risk, the underlying problems relate to an endogenous build-up of widespread imbalances in one or several parts of a financial system, such as high concentrations of lending in certain sectors of the economy or more general credit booms in a nation. Minsky depicted the endogeno ...
A Qualitative Analysis of Pakistan`s External and Internal Debt
... sustain debt has worsened. It appears as though, after a decade of calm, Pakistan is again on the brink of debt crises both on the foreign and domestic fronts. While the quantitative burden of external debt, as measured by the debt-to-GDP ratio has registered a significant increase from 58.57 percen ...
... sustain debt has worsened. It appears as though, after a decade of calm, Pakistan is again on the brink of debt crises both on the foreign and domestic fronts. While the quantitative burden of external debt, as measured by the debt-to-GDP ratio has registered a significant increase from 58.57 percen ...
Summary - A review of the surplus target
... efficiency. Hence the choice of target level has become a matter of weighing up the safety margins that are judged to be necessary in a deep recession in relation to the value of the higher expenditure and/or lower taxes that a changed surplus target entails during a long transition period. The Comm ...
... efficiency. Hence the choice of target level has become a matter of weighing up the safety margins that are judged to be necessary in a deep recession in relation to the value of the higher expenditure and/or lower taxes that a changed surplus target entails during a long transition period. The Comm ...
Public Debt and Economic Growth
... income distribution and fiscal stability at the same time. Following their line of thought, any economic system can only achieve two goals simultaneously, while the other one has to be neglected. Although this trilemma does not need to be impossible to solve, there certainly is a trade-off involved ...
... income distribution and fiscal stability at the same time. Following their line of thought, any economic system can only achieve two goals simultaneously, while the other one has to be neglected. Although this trilemma does not need to be impossible to solve, there certainly is a trade-off involved ...
Making a reality of GDP-linked sovereign bonds Authored by Bank
... The right-hand bar shows how much lower the variance in debt-to-GDP ratios would have been for G7 countries if they had all their government debt indexed to GDP. The variance is reduced by more than 40%, driven by the negative relationship between interest payments on GDP-linked bonds and growth. Th ...
... The right-hand bar shows how much lower the variance in debt-to-GDP ratios would have been for G7 countries if they had all their government debt indexed to GDP. The variance is reduced by more than 40%, driven by the negative relationship between interest payments on GDP-linked bonds and growth. Th ...
NBER WORKING PAPER SERIES Paul Beaudry Amartya Lahiri
... view our narrative as telling a cautionary tale. While the allocation of risk to those most willing to bear it has the potential of favoring economic activity, it can, at the same time, also render the system sensitive to small perturbations, especially if those events cause risk tolerant individual ...
... view our narrative as telling a cautionary tale. While the allocation of risk to those most willing to bear it has the potential of favoring economic activity, it can, at the same time, also render the system sensitive to small perturbations, especially if those events cause risk tolerant individual ...
Public Debt and Economic Growth – Economic Systems Matter
... income distribution and fiscal stability at the same time. Following their line of thought, any economic system can only achieve two goals simultaneously, while the other one has to be neglected. Although this trilemma does not need to be impossible to solve, there certainly is a trade-off involved ...
... income distribution and fiscal stability at the same time. Following their line of thought, any economic system can only achieve two goals simultaneously, while the other one has to be neglected. Although this trilemma does not need to be impossible to solve, there certainly is a trade-off involved ...
NBER WORKING PAPER SERIES SOVEREIGN DEFAULT, DEBT RESTRUCTURING, AND RECOVERY RATES:
... the global economy. The three better known cases are the Russian default of 1998, the Argentine default of 2001, and the Greek default of 2012. But there were many others, including defaults and restructurings in the Ukraine, Cameroon, and Uruguay. In almost every one of these episodes investors inc ...
... the global economy. The three better known cases are the Russian default of 1998, the Argentine default of 2001, and the Greek default of 2012. But there were many others, including defaults and restructurings in the Ukraine, Cameroon, and Uruguay. In almost every one of these episodes investors inc ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... derived as a function of the real world interest rate, the spread and its responsiveness to the external debt burden and market perception of country risk, the propensity to save out of gross national disposable income, rates of technical change, and parameters of the production function. Being conc ...
... derived as a function of the real world interest rate, the spread and its responsiveness to the external debt burden and market perception of country risk, the propensity to save out of gross national disposable income, rates of technical change, and parameters of the production function. Being conc ...
Chapter 6 Long-run aspects of fiscal policy and
... liquid deposits in the central bank held by the private sector at the beginning of period t; Mt is by de…nition nonnegative. Ignoring, at least to begin with, uncertainty and risk of default, the nominal interest rate on government bonds must be the same as that on other interestbearing assets in th ...
... liquid deposits in the central bank held by the private sector at the beginning of period t; Mt is by de…nition nonnegative. Ignoring, at least to begin with, uncertainty and risk of default, the nominal interest rate on government bonds must be the same as that on other interestbearing assets in th ...
Medium Term Debt Strategy
... Following the upgrade of Tonga to a moderate risk level, the MoFNP continues to be cautious and to closely monitor GoT’s debt sustainability level in line with the recommended targets. During this initial MTDS period, practical options must be identified for GoT to implement in order to keep its fut ...
... Following the upgrade of Tonga to a moderate risk level, the MoFNP continues to be cautious and to closely monitor GoT’s debt sustainability level in line with the recommended targets. During this initial MTDS period, practical options must be identified for GoT to implement in order to keep its fut ...
SOAH DOCKET NO. 473-95-1563
... With respect to this statement by PG&E, I would point out that each state restructuring statute is different and unique. ...
... With respect to this statement by PG&E, I would point out that each state restructuring statute is different and unique. ...
Tax Biases to Debt Finance
... (including the U.S.) tax income on a worldwide basis and provide a credit for foreign tax paid. The incentives for debt shifting to low-tax countries may be smaller under this credit system because the tax rate of the parent country ultimately applies to foreign income. However, credit systems gener ...
... (including the U.S.) tax income on a worldwide basis and provide a credit for foreign tax paid. The incentives for debt shifting to low-tax countries may be smaller under this credit system because the tax rate of the parent country ultimately applies to foreign income. However, credit systems gener ...
Reinhart and Rogoff
... became a way of describing emerging market financial systems prior to the widespread financial liberalization that began in the 1980 (see Giovannini and Di Melo, 1993 and Easterly, 1989). However, as we document in this paper, financial repression was also the norm for advanced economies during the ...
... became a way of describing emerging market financial systems prior to the widespread financial liberalization that began in the 1980 (see Giovannini and Di Melo, 1993 and Easterly, 1989). However, as we document in this paper, financial repression was also the norm for advanced economies during the ...
Short-Term Capital Flows
... upswing in the cycle. Substantial evidence suggests that controls (of very di¤erent kinds) applied by countries such as Chile, Colombia and Malaysia altered the maturity composition of loans from abroad without —at least in the South American cases— reducing the overall volume of ‡ows. Lengthening o ...
... upswing in the cycle. Substantial evidence suggests that controls (of very di¤erent kinds) applied by countries such as Chile, Colombia and Malaysia altered the maturity composition of loans from abroad without —at least in the South American cases— reducing the overall volume of ‡ows. Lengthening o ...
On the logic, fairness and legality of discriminating
... non-residents, regardless of whether the debt is in local or foreign currency, whether it is issued at home or abroad. Conversely, domestic debt is debt by residents, regardless of whether the debt is in local or foreign currency, whether it is issued at home or abroad. So a Brady held by an Argent ...
... non-residents, regardless of whether the debt is in local or foreign currency, whether it is issued at home or abroad. Conversely, domestic debt is debt by residents, regardless of whether the debt is in local or foreign currency, whether it is issued at home or abroad. So a Brady held by an Argent ...
Credit Card Debt and Consumption
... Kerr and Dunn, 2007). Researchers have also estimated interest rate elasticity of credit card debt (See Gross and Souleles, 2002b; Shen and Giles, 2006). Another strain of the literature has looked at the effect of credit card debt on default and bankruptcy (See Laderman, 1996; Ausubel, 1997; Dunn a ...
... Kerr and Dunn, 2007). Researchers have also estimated interest rate elasticity of credit card debt (See Gross and Souleles, 2002b; Shen and Giles, 2006). Another strain of the literature has looked at the effect of credit card debt on default and bankruptcy (See Laderman, 1996; Ausubel, 1997; Dunn a ...