Original Sin and Procylical Fiscal Policy.

The paper develops a simple model of sovereign debt where default both through direct repudiation and through inflation are possible and give rise to (endogenous) constraints on the currency composition and the level of public debt. This set up allows to show that procyclicality of fiscal policy in...

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Detalles Bibliográficos
Clasificación:Libro Electrónico
Autor principal: Adler, Gustavo
Formato: Electrónico eBook
Idioma:Inglés
Publicado: Washington : International Monetary Fund, 2008.
Colección:IMF Working Papers.
Temas:
Fiscal policy > Econometric models.
Business cycles > Econometric models.
Financial crises > Econometric models.
Politique fiscale > Modèles économétriques.
Cycles économiques > Modèles économétriques.
Business cycles > Econometric models
Financial crises > Econometric models
Fiscal policy > Econometric models
Acceso en línea:Texto completo
Descripción
Sumario:The paper develops a simple model of sovereign debt where default both through direct repudiation and through inflation are possible and give rise to (endogenous) constraints on the currency composition and the level of public debt. This set up allows to show that procyclicality of fiscal policy in EMEs can arise as a by-product of the ""original sin"" and both can be explained by the presence of weak monetary institutions which cannot commit to price stability. The paper suggests that, as monetary institutions in EMEs strengthen, the ""original sin"" would fade away and the cyclical propertie.
Descripción Física:1 online resource (29 pages)
ISBN:9781451915204
1451915209

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