scholarly journals International Credit Flows and Pecuniary Externalities

2015 ◽  
Author(s):  
Markus Konrad Brunnermeier ◽  
Yuliy Sannikov
Keyword(s):  
Pecuniary Externalities ◽  
International Credit

scholarly journals International Credit Flows and Pecuniary Externalities

2014 ◽  
Author(s):  
Markus Brunnermeier ◽  
Yuliy Sannikov
Keyword(s):  
Pecuniary Externalities ◽  
International Credit

scholarly journals International Credit Flows and Pecuniary Externalities

2015 ◽  
Vol 7 (1) ◽  
pp. 297-338 ◽  
Author(s):  
Markus K. Brunnermeier ◽  
Yuliy Sannikov
Keyword(s):  
Incomplete Markets ◽  
Production Capacity ◽  
Capital Controls ◽  
Terms Of Trade ◽  
Equilibrium Outcome ◽  
Short Term ◽  
Stochastic Growth ◽  
Fire Sales ◽  
Pecuniary Externalities ◽  
International Credit

This paper develops a dynamic two-country neoclassical stochastic growth model with incomplete markets. Short-term credit flows can be excessive and reverse suddenly. The equilibrium outcome is constrained inefficient due to pecuniary externalities. First, an undercapitalized country borrows too much since each firm does not internalize that an increase in production capacity undermines their output price, worsening their terms of trade. From an ex ante perspective each firm undermines the natural “terms of trade hedge.” Second, sudden stops and fire sales lead to sharp price drops of illiquid capital. Capital controls or domestic macro-prudential measures that limit short-term borrowing can improve welfare. (JEL F32, F43, G15, O41)

INTERACTION OF THE NATIONAL ECONOMY OF UKRAINE WITH INTERNATIONAL CREDIT AND FINANCIAL ORGANIZATIONS

2017 ◽  
Author(s):  
Serhii Voitko ◽  
◽  
Yuliia Borodinova ◽  
Keyword(s):  
Financial Institutions ◽  
National Economy ◽  
Financial Support ◽  
Global Economy ◽  
Financial Sector ◽  
Negative Consequences ◽  
International Financial Institutions ◽  
The Future ◽  
International Credit

The article examines the interaction of the national economy of Ukraine with international credit and financial organizations, evaluates the positive and negative consequences and identifies possible areas for further cooperation. The role of international credit and financial organizations in the development of the global economy is analyzed. Today, international financial institutions have taken a leading place among institutions that provide financial support and contribute to the implementation of necessary reforms aimed at developing enterprises in various sectors of the economy and strengthening the country's financial sector as a whole. The importance of cooperation between Ukraine and international financial institutions for the development of the country's economy has been determined. The problems and directions of development of cooperation with leading credit and financial organizations in modern conditions are identified. Despite the presence of certain shortcomings, cooperation between Ukraine and international credit and financial organizations will continue in the future.

scholarly journals International credit supply shocks

2018 ◽  
Vol 112 ◽  
pp. 219-237 ◽  
Author(s):  
Ambrogio Cesa-Bianchi ◽  
Andrea Ferrero ◽  
Alessandro Rebucci
Keyword(s):  
Credit Supply ◽  
Supply Shocks ◽  
International Credit

scholarly journals International credit markets and global business cycles

2018 ◽  
Vol 15 (1) ◽  
pp. 53-75
Author(s):  
Patrick A. Pintus ◽  
Yi Wen ◽  
Xiaochuan Xing
Keyword(s):  
Business Cycles ◽  
Credit Markets ◽  
Global Business ◽  
International Credit

scholarly journals Should Easier Access to International Credit Replace Foreign Aid?

2011 ◽  
Author(s):  
Subhayu Bandyopadhyay ◽  
Sajal Lahiri ◽  
Javed Younas
Keyword(s):  
Foreign Aid ◽  
International Credit

scholarly journals Should Easier Access to International Credit Replace Foreign Aid?

2011 ◽  
Author(s):  
Subhayu Bandyopadhyay ◽  
Sajal Lahiri ◽  
Javed Younas
Keyword(s):  
Foreign Aid ◽  
International Credit

Economic coercion and the problem of sanctions-proofing

2018 ◽  
Vol 37 (4) ◽  
pp. 385-408 ◽  
Author(s):  
Menevis Cilizoglu ◽  
Navin A Bapat
Keyword(s):  
Interest Rates ◽  
Credit Markets ◽  
Credit Ratings ◽  
Economic Costs ◽  
High Interest ◽  
International Credit ◽  
Economic Coercion ◽  
Target States ◽  
Borrowing Cost ◽  
Do So

Although sanctions generate economic costs, target states may “sanctions-proof” their regime by borrowing capital from abroad. While some targets obtain interest-free capital from black knight states, others may need to borrow with interest from international credit markets. These interest rates may sometimes make borrowing cost-prohibitive, giving targets no choice but to acquiesce to the demands of the sender. However, since senders cannot observe if black knight states are assisting target states, targets have an incentive to misrepresent their source of external capital. In an effort to deter sanctions, targets that must borrow at high interest rates may signal that they have black knight support and are sanctions-proofed. We formally and empirically demonstrate that in this uncertain environment, senders are more likely to impose sanctions on targets with low credit ratings, but only do so if the target places a relatively low value on uninterrupted economic transactions with the sender.

Sign in / Sign up

Export Citation Format

Share Document