International Financial Contagion and the IMF : A Theoretical Framework /

We provide a model of contagion where countries borrow or lend for consumption smoothing at the market interest rate or a lower IMF rate. Highly indebted countries hit by large negative shocks to output will default. The resulting reduction in loanable funds raises interest rates, increases the vuln...

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書目詳細資料
主要作者: Clark, Peter
其他作者: Huang, Haizhou
格式: 雜誌
語言:English
出版: Washington, D.C. : International Monetary Fund, 2001.
叢編:IMF Working Papers; Working Paper ; No. 2001/137
在線閱讀:Full text available on IMF
實物特徵
總結:We provide a model of contagion where countries borrow or lend for consumption smoothing at the market interest rate or a lower IMF rate. Highly indebted countries hit by large negative shocks to output will default. The resulting reduction in loanable funds raises interest rates, increases the vulnerability of other indebted countries, and can generate further rounds of defaults. In this environment the IMF can limit default and internalize the externality generated by contagion through its lending with conditionality. We characterize the IMF's optimal lending decision in mitigating the loss in world consumption.
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實物描述:1 online resource (31 pages)
格式:Mode of access: Internet
ISSN:1018-5941
訪問:Electronic access restricted to authorized BRAC University faculty, staff and students