Risultati della ricerca
Creator: Kehoe, Timothy Jerome, 1953- and Ruhl, Kim J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 414 Abstract:
A sudden stop of capital flows into a developing country tends to be followed by a rapid switch from trade deficits to surpluses, a depreciation of the real exchange rate, and decreases in output and total factor productivity. Substantial reallocation takes place from the nontraded sector to the traded sector. We construct a multisector growth model, calibrate it to the Mexican economy, and use it to analyze Mexico's 1994–95 crisis. When subjected to a sudden stop, the model accounts for the trade balance reversal and the real exchange rate depreciation, but it cannot account for the decreases in GDP and TFP. Extending the model to include labor frictions and variable capital utilization, we still find that it cannot quantitatively account for the dynamics of output and productivity without losing the ability to account for the movements of other variables.
Parola chiave: Sudden stop, Nontradable, Real exchange rate, Developing country crisis, Total factor productivity, Mexico, and Tradable Soggetto: F32 - Current Account Adjustment; Short-term Capital Movements, O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence, F34 - International Lending and Debt Problems, O54 - Economywide Country Studies: Latin America; Caribbean, F21 - International Investment; Long-term Capital Movements, F43 - Economic Growth of Open Economies, O41 - One, Two, and Multisector Growth Models, and E21 - Macroeconomics: Consumption; Saving; Wealth
Creator: Cole, Harold Linh, 1957- and Kehoe, Timothy Jerome, 1953- Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 210 Abstract:
This paper explores the extent to which the Mexican government's inability to roll over its debt during December 1994 and January 1995 can be modeled as a self-fulfilling debt crisis. In the model there is a crucial interval of debt for which the government, although it finds it optimal to repay old debt if it can sell new debt, finds it optimal to default if it cannot sell new debt. If government debt is in this interval, which we call the crisis zone, then we can construct equilibria in which a crisis can occur stochastically, depending on the realization of a sunspot variable. The size of this zone depends on the average length of maturity of government debt. Our analysis suggests that for a country, like Mexico, with a very short maturity structure of debt, the crisis zone is large and includes levels of debt as low as that in Mexico before the crisis.
Parola chiave: Sunspot, Debt crisis, and Mexico Soggetto: F34 - International Lending and Debt Problems, E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General, and H63 - National Debt; Debt Management; Sovereign Debt