Are Asset Price Guarantees Useful for Preventing Sudden Stops?A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff / / Enrique Mendoza, Ceyhun Bora Durdu

• Autore: Mendoza Enrique
• Pubblicazione: Washington, D.C. : , : International Monetary Fund, , 2006
• Descrizione fisica: 1 online resource (42 p.)
• Soggetto topico: Economic policy; Globalization; Exports and Imports; Finance: General; Investments: Stocks; Macroeconomics; International Investment; Long-term Capital Movements; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors; Price Level; Inflation; Deflation; Macroeconomics: Consumption; Saving; Wealth; General Financial Markets: Government Policy and Regulation; International economics; Investment & securities; Finance; Sudden stops; Stocks; Asset prices; Consumption; Moral hazard; Capital movements; Prices; Economics; Financial risk management
• Soggetto geografico: Mexico
• Altri autori: DurduCeyhun Bora
• Note generali: "March 2006."
• Nota di bibliografia: Includes bibliographical references.
• Nota di contenuto: ""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""
• Sommario/riassunto: 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.
• Titolo autorizzato: Are Asset Price Guarantees Useful for Preventing Sudden Stops?A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff
• ISBN: 1-4623-3770-8; 1-4527-0878-9; 1-283-51818-X; 1-4519-0869-5; 9786613830630
• Formato: Materiale a stampa
• Livello bibliografico: Monografia
• Lingua di pubblicazione: Inglese
• Record Nr.: 9910788696103321
• Lo trovi qui: Univ. Federico II
• Serie: IMF Working Papers; Working Paper ; ; No. 2006/073