Abstract This article shows that the inability to use monetary policy for macroeconomic stabilization leaves a government more vulnerable rollover crisis. We study sovereign default model with self-fulfilling crises, foreign currency debt, and nominal rigidities. When lacks independence, lenders anticipate would face severe recession in event of liquidity crisis are therefore prone run on bonds...

abstract the global economy faces crisis every so often. in recent years, the financial crisis has affected the global economy; all countries, directly or indirectly, are involved. the purpose of this research is to study the impact of the global economic crisis on the capital structure of listed companies in tehran stock exchange. to test this effect, 87 companies listed in tehran stock exchan...

This paper studies the Greek sovereign debt crisis in aftermath of 2007-8 global financial looking for barriers to, and engines of, growth. The vehicle is a calibrated medium-scale micro-founded macroeconomic model. Departing from 2008, our simulations show that adopted economic adjustment program (the fiscal austerity mix combined with monetary assistance provided by EU, ECB IMF), jointly obse...

Sovereigns usually back up their deposit insurance arrangements to lend them credibility. When the sovereign is in distress, credibility of might be threatened, with detrimental effects financial stability. We investigate behavior depositors during euro area debt crisis understand importance find that responded foreign banks’ decision convert subsidiaries into branches. By relocating deposits t...

The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate, and the extent to which they apply to international lending. Two recent proposals are considered in more detail, that of Krueger (‘A New Approach to Sovereign Debt Restructuring’) and that of Pett...

I develop a novel link between frictions in international financial markets and fiscal procyclicality. Complementing existing evidence, A decomposition of government expenditure into social spending and public good spending reveals that the cyclical correlation of social spending exhibits the biggest differences across countries. I build a small open economy model with income inequality, endoge...