Existence of equilibria with infinitely many goods, incomplete markets and bankrutcy
In: Discussion paper No. 435
In: BoWo discussion paper series
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In: Discussion paper No. 435
In: BoWo discussion paper series
In: Revista de economia política: Brazilian journal of political economy, Band 29, Heft 3, S. 191-212
ISSN: 1809-4538
In: Economia: journal of the Latin American and Caribbean Economic Association, Band 6, Heft 1, S. 149-216
ISSN: 1533-6239
In: Journal of international economics, Band 89, Heft 1, S. 143-153
ISSN: 0022-1996
In this paper we propose a dynamic stochastic general equilibrium model to evaluate …financial adjustments that some emerging market economies went through to overcome external crises during the latest decades, such as default and local currency devaluation. We assume that devaluation can be used to avoid external debt default, to improve trade balance and to reduce the real public debt level denominated in local currency. Such effects increase the government ability to deal with external crisis, but also have costs in terms of welfare, related to expected in‡flation, reductions in private investments and higher interest to be paid over the public debt. We conclude that openness improves expected welfare as it allows for a better devaluation-response technology against crises. We also present results for 32 middle-income countries, verifying that the proposed model can indicate, in a stylized way, the preferences for default-devaluation options and the magnitude of the currency depreciation required to overcome 48 external crises occurred as from 1971. Finally, as we construct our model based on the Cole-Kehoe self-fulfilling debt crisis model, adding local debt and trade, it is important to say that their policy alternatives to leave the crisis zone remains in our extended model, namely, to reduce the external debt level and to lengthen its maturity. ; Com base em uma versão estendida do modelo Cole and Kehoe, avaliamos eventos de default e de desvalorizações cambiais. Historicamente, as desvalorizações têm ajudado na superação de crises financeiras ao estimular a balança comercial e ao reduzir o valor real da divida publica denominada em moeda nacional. Por outro lado, a expectativa de uma possível desvalorização produz efeitos negativos sobre o bem-estar: aumento do custo da divida e redução do nível de investimento privado. Modelamos esses trade-offs e mostramos que a abertura comercial melhora o bem-estar ao potencializar o efeito da desvalorização de câmbio sobre a balança comercial. Computamos simulações numéricas baseadas em 48 crises ocorridas em 32 países, e obtivemos resultados alinhados com as desvalorizações e os defaults observados desde 1971.
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In: The Rand journal of economics, Band 38, Heft 4, S. 1020-1043
ISSN: 1756-2171
We develop a job‐market signalling model where signals convey two pieces of information. This model is employed to study countersignalling (signals nonmonotonic in ability) and the GED exam. A result of the model is that countersignalling is more likely to occur in jobs that require a combination of skills that differs from the combination used in the schooling process. The model also produces testable implications consistent with evidence on the GED: (i) it signals both high cognitive and low noncognitive skills and (ii) it does not affect wages.
In: Revista Brasileira Economia Rio de Janeiro v. 66 n. 2 / p. 135–165 Abr-Jun 2012
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In: Departamento de Economía de la Empresa Universidad Carlos III de Madrid Working Paper 06-59, Economics Series 24, October 2006
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In: NBER Working Paper No. w19711
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Working paper
In: Journal of Financial Economics (JFE), Band 150, Heft 2
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Working paper