Private Sector Risk and Financial Crises in Emerging Markets

被引:1
作者
Daniel, Betty C. [1 ]
机构
[1] SUNY Albany, Dept Econ, Albany, NY 12222 USA
关键词
ASIAN CURRENCY; SUDDEN STOPS; AGENCY COSTS; NET WORTH; MODEL; CREDIT;
D O I
10.1111/j.1468-0297.2011.02483.x
中图分类号
F [经济];
学科分类号
02 ;
摘要
Investment necessary for growth is risky and often requires external financing. We present a model in which capital market imperfections separate countries into a safe credit club of industrial countries, with low interest rates and steady credit access and a risky club of emerging markets, with high interest rates and volatile access. In an emerging market, a large negative productivity shock interacts with credit-market imperfections to trigger a severe contraction in external lending. Domestic agents react with widespread default. We calibrate to South Korean parameters and argue that the 1998 financial crisis could have been the downside of risky investment financed in imperfect capital markets.
引用
收藏
页码:825 / 847
页数:23
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