05110oam 22013094 450 991082218010332120200520144314.01-4623-3770-81-4527-0878-91-283-51818-X1-4519-0869-59786613830630(CKB)3360000000443987(EBL)3014509(SSID)ssj0000940052(PQKBManifestationID)11518979(PQKBTitleCode)TC0000940052(PQKBWorkID)10946751(PQKB)11219631(OCoLC)694141199(IMF)WPIEE2006073(MiAaPQ)EBC3014509(IMF)WPIEA2006073(EXLCZ)99336000000044398720020129d2006 uf 0engur|n|---|||||txtccrAre Asset Price Guarantees Useful for Preventing Sudden Stops?A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff /Enrique Mendoza, Ceyhun Bora Durdu1st ed.Washington, D.C. :International Monetary Fund,2006.1 online resource (42 p.)IMF Working Papers"March 2006."1-4518-6333-0 Includes bibliographical references.""Contents""; ""I. INTRODUCTION""; ""II. A MODEL OF GLOBALIZATION HAZARD AND PRICE GUARANTEES""; ""III. CHARACTERIZING THE GLOBALIZATION HAZARD-MORAL HAZARD TRADEOFF""; ""IV. QUANTITATIVE ANALYSIS""; ""V. NORMATIVE IMPLICATIONS AND SENSITIVITY ANALYSIS""; ""VI. CONCLUSIONS""; ""REFERENCES""An implication of the "globalization hazard" hypothesis is that sudden stops could be prevented by offering foreign investors price guarantees on emerging markets assets. These guarantees create a tradeoff, however, because they weaken globalization hazard by creating international moral hazard. We study this tradeoff using an equilibrium asset-pricing model. Without guarantees, margin calls and trading costs cause Sudden Stops driven by Fisher's debt-deflation process. Price guarantees prevent this deflation by propping up foreign asset demand, but their effectiveness and welfare implications depend critically on the price elasticity of foreign demand and on making the guarantees contingent on debt levels.IMF Working Papers; Working Paper ;No. 2006/073Economic policyGlobalizationAsset pricesimfCapital movementsimfConsumptionimfDeflationimfEconomicsimfExports and ImportsimfFinanceimfFinance: GeneralimfFinancial InstrumentsimfFinancial risk managementimfGeneral Financial Markets: Government Policy and RegulationimfInflationimfInstitutional InvestorsimfInternational economicsimfInternational InvestmentimfInvestment & securitiesimfInvestments: StocksimfLong-term Capital MovementsimfMacroeconomicsimfMacroeconomics: ConsumptionimfMoral hazardimfNon-bank Financial InstitutionsimfPension FundsimfPrice LevelimfPricesimfSavingimfStocksimfSudden stopsimfWealthimfMexicoimfEconomic policy.Globalization.Asset pricesCapital movementsConsumptionDeflationEconomicsExports and ImportsFinanceFinance: GeneralFinancial InstrumentsFinancial risk managementGeneral Financial Markets: Government Policy and RegulationInflationInstitutional InvestorsInternational economicsInternational InvestmentInvestment & securitiesInvestments: StocksLong-term Capital MovementsMacroeconomicsMacroeconomics: ConsumptionMoral hazardNon-bank Financial InstitutionsPension FundsPrice LevelPricesSavingStocksSudden stopsWealthMendoza Enrique119545Durdu Ceyhun Bora1169974International Monetary Fund.Research Dept.DcWaIMFBOOK9910822180103321Are Asset Price Guarantees Useful for Preventing Sudden Stops?A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff4238404UNINA