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Sunday, July 19, 2020 | History

3 edition of Precautionary demand for foreign assets in sudden stop economies found in the catalog.

Precautionary demand for foreign assets in sudden stop economies

Ceyhun Bora Durdu

Precautionary demand for foreign assets in sudden stop economies

an assessment of the new merchantilism

by Ceyhun Bora Durdu

  • 237 Want to read
  • 34 Currently reading

Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

    Subjects:
  • Business cycles -- Mathematical models,
  • Equilibrium (Economics) -- Mathematical models,
  • Globalization

  • Edition Notes

    StatementCeyhun Bora Durdu, Enrique G. Mendoza, Marco E. Terrones.
    SeriesNBER working paper series -- no. 13123., Working paper series (National Bureau of Economic Research) -- working paper no. 13123.
    ContributionsMendoza, Enrique G., 1963-, Terrones, Marco., National Bureau of Economic Research.
    The Physical Object
    Pagination27, [18] p. :
    Number of Pages27
    ID Numbers
    Open LibraryOL17634130M
    OCLC/WorldCa152543589

      Durdu, Ceyhun Bora, Enrique Mendoza, and Marco E. Terrones. Precautionary demand for foreign assets in sudden stop economies: An assessment of the new mercantilism. Journal of Development Economics – Article; Google ScholarCited by: 5. THE AmERICAN ECONOmIC REVIEW DECEmBER trend, the trade balance below trend, and high asset prices. The median Sudden Stop displays a reversal in the cyclical component of NXY of about 3 percentage points at date and C are about 4 percentage points below trend, and I collapses almost 20 percentage points below trend. A weak recovery .

    Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism by C. Bora Durdu, Enrique G. Mendoza, Marco Terrones, Abstract - Cited by 80 (18 self) - Add to MetaCart. Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism: 1: 2: 4: 1: 5: Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism: Working Paper 0: 0: 3: 0: 2:

    This is because; most commodity-intensive countries will depend on the prices of their exports on the commodity market to build-up their international reserves, and strong terms of trade could help in bringing in foreign assets for this purpose. Figure 4 shows the price elasticity of commodity-intensive : Abdul-Rashid Abdul-Rahaman, Hongxing Yao. Precautionary demand for foreign assets in Sudden Stop economies: An assessment of the New Mercantilism ☆ Financial globalization had a rocky start in emerging economies hit by Sudden Stops. Foreign reserves have grown very rapidly since then, as if those countries were practicing a New Mercantilism that views foreign reserves as a war.


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Precautionary demand for foreign assets in sudden stop economies by Ceyhun Bora Durdu Download PDF EPUB FB2

Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops in the s. The surge in foreign reserves since then is viewed as a New Merchantilism in which reserves are a war-chest for defense against Sudden Stops.

We conduct a quantitative assessment of this argument using a framework in which precautionary savings affect foreign assets.

Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Merchantilism1 Prepared by Ceyhun Bora Durdu, Enrique G. Mendoza, Marco E. Terrones Authorized for distribution by Stijn Claessens June Abstract This Working Paper should not be reported as representing the views of the IMF.

Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism: Working Paper July 1, Working Paper. Financial globalization in emerging economies has been challenged by a series of Sudden Stops since the mid s. View Document.

precautionary foreign asset demand is driven by output variability, financial globalization, and Sudden Stop risk. In this framework, credit constraints produce endogenous Sudden Stops. We find that financial globalization and Sudden Stop risk can explain the surge in reserves but output variability cannot.

TheseCited by: Precautionary demand for foreign assets in Sudden Stop economies: conducts a quantitative assessment of this argument using a stochastic intertemporal equilibrium framework in which precautionary foreign asset demand is driven by output variability, financial globalization, and Sudden Stop risk.

Cited by: Published: Durdu, Ceyhun Bora & Mendoza, Enrique G. & Terrones, Marco E., "Precautionary demand for foreign assets in Sudden Stop economies: An assessment of the New Mercantilism," Journal of Development Economics, Elsevier, vol.

89(2), pagesJuly. citation courtesy of. Users who downloaded this paper also downloaded* these. of foreign asset holdings and the magnitude and likelihood of Sudden Stops. As a result, the economy builds a buffer stock of savings so as to minimize the risk of landing in states of nature in which debt is high enough for a Sudden Stop to trigger massive consumption collapses.

However, if we consider the build up of precautionary asset holdings from the perspective of an economy where Sudden Stop risk has just been introduced, the model predicts that agents would need to enlarge their war chest of foreign assets by Cited by: surge in reserves: The large buildup of foreign assets in response to financial globalization or Sudden Stop risk is a slow, gradual process characterized by current account surpluses and undervalued real exchange rates.

Those dynamics do not require central bank intervention to target the real exchange rate in efforts to promote exports. The model is calibrated to match the variability and persistence of output in Sudden Stop.

economies and then used to compute the optimal short- and long-run dynamics of foreign. assets triggered by changes in output volatility and financial globalization. Ceyhun Bora Durdu & Enrique G. Mendoza & Marco E. Terrones, "Precautionary demand for foreign assets in sudden stop economies: an assessment of the new mercantilism," International Finance Discussion PapersBoard of Governors of the Federal Reserve System (U.S.), revised Marco E.

Terrones & Enrique G. Mendoza & Ceyhun Bora Durdu, Request PDF | On Dec 1,Ceyhun Bora Durdu and others published Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism | Find, read and cite.

Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Merchantilism. By Ceyhun Bora Durdu, Enrique G. Mendoza and Marco E. Terrones. Download PDF ( KB) Abstract. Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops since the mid s.

Precautionary demand for foreign assets in sudden stop economies: an assessment of the new mercantilism. By Ceyhun Bora Durdu, Enrique G. Mendoza and Marco E. Terrones. Abstract. Financial globalization had a rocky start in emerging economies hit by Sudden Stops.

Foreign reserves have grown very rapidly since then, as if those countries were. reliant precautionary bu er approach by building-up large reserve holdings.

This resulted in global imbalances, which possibly distorted interest and exchange rates. Holding reserves also incurs carry cost for the emerging economy, as the interest on safe foreign reserve assets is typically signi cantly lower than on domestic Size: KB. Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism: Working Paper C.

Bora Durdu, Enrique Mendoza and Marco Terrones (). NoWorking Papers from Congressional Budget Office Abstract: Financial globalization in emerging economies has been challenged by a series of Sudden Stops since Cited by: BibTeX @MISC{Durdu07precautionarydemand, author = {Ceyhun Bora Durdu and Enrique G.

Mendoza and Marco E. Terrones}, title = {Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Mercantilism }, year = {}}. Get this from a library.

Precautionary Demand for Foreign Assets in Sudden Stop Economies. [Enrique G Mendoza; Ceyhun Bora Durdu; Marco Terrones] -- Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops in the s. The surge in foreign reserves since then is viewed as a New Merchantilism in which reserves.

A sudden stop in capital flows is defined as a sudden slowdown in private capital inflows into emerging market economies, and a corresponding sharp reversal from large current account deficits into smaller deficits or small surpluses.

Sudden stops are usually followed by a sharp decrease in output, private spending and credit to the private sector, and real exchange rate.

Durdu, Mendoza & Terrones(), “Precautionary demand for foreign assets in sudden stop economies”, J. Dev. Econ. 89(2) Edwards, S.(), “Sequencing of. Get this from a library!

Precautionary demand for foreign assets in sudden stop economies: an assessment of the new merchantilism. [Ceyhun Bora Durdu; Enrique G Mendoza; Marco Terrones; National Bureau of Economic Research.] -- Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops since the mid s.estimates of foreign assets and liabilities, ," J.

of International Econ, vol. 73(2), pages Mendoza, E. "Real Business Cycles in a Small Open Economy," American Economic Review, Mendoza, E., "Capital Controls and the Gains from Trade in a Business Cycle Model of a Small Open Economy, IMF Staff Papers, Precautionary demand for foreign assets in Sudden Stop economies: An assessment of the New Mercantilism Journal of Development Economics,89, (2), View citations () See also Working Paper () Quantitative implications of indexed bonds in small open economies.