Credit, prices, and crashes: business cycles with a sudden stop

The 1990s emerging-markets crises were characterized by sudden reversals in inflows of foreign capital followed by unusually large declines in current account deficits, private expenditures, production, and prices of nontradable goods relative to tradables. This paper shows that these Sudden Stops c...

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Autor principal: Mendoza, Enrique G.
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 2001
Materias:
Ciencias Económicas
negocios
política de precios
crédito
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/3779
http://www.depeco.econo.unlp.edu.ar/jemi/2001/trabajo11.pdf
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-3779
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
negocios
política de precios
crédito
spellingShingle Ciencias Económicas
negocios
política de precios
crédito
Mendoza, Enrique G.
Credit, prices, and crashes: business cycles with a sudden stop
topic_facet Ciencias Económicas
negocios
política de precios
crédito
description The 1990s emerging-markets crises were characterized by sudden reversals in inflows of foreign capital followed by unusually large declines in current account deficits, private expenditures, production, and prices of nontradable goods relative to tradables. This paper shows that these Sudden Stops can be the outcome of the equilibrium dynamics of a flexible-price economy with imperfect credit markets. Foreign debt is denominated in units of tradables and a liquidity constraint links credit-market access to the income generated in the nontradables sector and the relative price of nontradables. Sudden Stops occur when real shocks of foreign or domestic origin, or policy-induced shocks make this constraint binding. Sudden Stops are not reflected in long-run business cycle statistics but still they entail nontrivial welfare costs. These results question crises-management policies seeking to impose direct controls on private capital flows and favor those that work to weaken credit frictions.
format Objeto de conferencia
Objeto de conferencia
author Mendoza, Enrique G.
author_facet Mendoza, Enrique G.
author_sort Mendoza, Enrique G.
title Credit, prices, and crashes: business cycles with a sudden stop
title_short Credit, prices, and crashes: business cycles with a sudden stop
title_full Credit, prices, and crashes: business cycles with a sudden stop
title_fullStr Credit, prices, and crashes: business cycles with a sudden stop
title_full_unstemmed Credit, prices, and crashes: business cycles with a sudden stop
title_sort credit, prices, and crashes: business cycles with a sudden stop
publishDate 2001
url http://sedici.unlp.edu.ar/handle/10915/3779
http://www.depeco.econo.unlp.edu.ar/jemi/2001/trabajo11.pdf
work_keys_str_mv AT mendozaenriqueg creditpricesandcrashesbusinesscycleswithasuddenstop
bdutipo_str Repositorios
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