Are Asset Price Guarantees Useful for Preventing Sudden Stops?A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff »
Series: IMF Working Papers
Author(s): Enrique Mendoza , and Ceyhun Bora Durdu
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 March 2006
Keywords: Fisherian deflation, globalization hazard, price guarantees, bonds, trading costs, bond, Open Economy Macroeconomics, Financial Markets and the Macroeconomy, Fisherian Delfation,
An implication of the "globalization hazard" hypothesis is that sudden stops could be prevented by offering foreign investors price guarantees on emerging markets assets. These guarantees create a tradeoff, however...