Papers by Carmen M Reinhart
Resumen Este trabajo presenta un análisis teórico y empírico de las políticas dirigidas a alcanza... more Resumen Este trabajo presenta un análisis teórico y empírico de las políticas dirigidas a alcanzar un nivel más depreciado de la tasa de cambio real. Un modelo de optimización intertemporal sugiere que, en ausencia de cambios en la política fiscal, un nivel más depreciado de la tasa de cambio real sólo puede mantenerse de manera temporal. Esto puede lograrse a través de un mayor nivel de la inflación y/o tasa real de interés, dependiendo del grado de movilidad del capital.
ABSTRACT The Asian crisis took place against a background of exchange rate regimes that were char... more ABSTRACT The Asian crisis took place against a background of exchange rate regimes that were characterized as soft pegs. This has led many analysts to conclude that “the peg did it" and that emerging markets (EMs) should “just say no" to pegged exchange rates. We present evidence that EMs are very different from developed economies in key dimensions that play a key role when it comes to the choice of exchange rate regime--floating for EMs is no panacea.
Abstract The literature on the international transmission of shocks has not discriminated where t... more Abstract The literature on the international transmission of shocks has not discriminated where the shocks originate. One might expect, that the global or regional consequences of a disturbance depend importantly whether the shock originates in the periphery--to borrow a term from Arthur Lewis--or in the center. We provide some preliminary answers to this question. Our approach is in the “event study” tradition, as we analyze the daily behavior of financial indicators for thirty-five countries in and around a collection of events.
Many emerging market countries have suffered financial crises. One view blames soft pegs for thes... more Many emerging market countries have suffered financial crises. One view blames soft pegs for these crises. Adherents of this view suggest that countries move to corner solutions-hard pegs or floating exchange rates. We analyze the behavior of exchange rates, reserves, and interest rates to assess whether there is evidence that country practice is moving toward corner solutions. We focus on whether countries that claim they are floating are indeed doing so.
You don't have to look far these days to find somebody talking about the fork-in-the-road facing ... more You don't have to look far these days to find somebody talking about the fork-in-the-road facing advanced economies when it comes to debt. There is no shortage of recommendations for either path, see for example see the Vox columns by Calvo 2010, Corsetti 2010, and Giavazzi 2010 last month.
I he experience of the past decade attests that international investors have considerable resourc... more I he experience of the past decade attests that international investors have considerable resources at their command in the search for high returns. While they are willing to commit capital to any national market in large volume, they are also capable of withdrawing that capital quickly. Movements of such funds—whether in or out—can have significant macroeconomic consequences, the latest reminders of which are the events in Mexico in 1994 and 1995 and in Asia in 1997.
Exchange rate based inflation stabilization programs in developing countries often lead to an ini... more Exchange rate based inflation stabilization programs in developing countries often lead to an initial consumption boom followed by an eventual recession. To explain such phenomenon, theoretical models have focused on the role of intertemporal consumption substitution in response to temporary reductions in nominal interest rates. This paper assesses the empirical relevance of such mechanism for six high-inflation developing countries that have gone through repeated stabilization attempts.
Abstract Even after one of the most severe multi-year crisis on record in the advanced economies,... more Abstract Even after one of the most severe multi-year crisis on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth.
В интервале (-∝ π< φ<∝ π) результат полностью зависит от ожиданий частных агентов. Таким образом,... more В интервале (-∝ π< φ<∝ π) результат полностью зависит от ожиданий частных агентов. Таким образом, в этом интервале существует несколько равновесий. При этом «основные показатели» также продолжают играть свою роль: рост безработицы или снижение цены отказа от фиксированного курса могут сыграть свою роль.
The standard pattern: capital flows into the new “hot” nation, but then stop or reverses forcing ... more The standard pattern: capital flows into the new “hot” nation, but then stop or reverses forcing painful adjustment. This column presents research based on such episodes from 181 nations during 1980-2007 and for a subset of 66 nations for the 1960-2007 period. If the pattern of the past few decades holds true, emerging market economies may be facing a darkening future.
There is a rich history of stabilizations in chronic inflation countries, which spans more than t... more There is a rich history of stabilizations in chronic inflation countries, which spans more than three decades. This provides a unique opportunity to identify the main patterns of adjustment and examine econometrically some of the main features of disinflation in chronic inflation countries. Our study is based on 17 stabilization plans from 1964 to the present in 7 countries: Argentina, Brazil, the Dominican Republic, Israel, Mexico, Peru, and Uruguay.
ABSTRACT We document that the global scope and depth of the crisis the began with the collapse of... more ABSTRACT We document that the global scope and depth of the crisis the began with the collapse of the subprime mortgage market in the summer of 2007 is unprecedented in the post World War II era and, as such, the most relevant comparison benchmark is the Great Depression (or the Great Contraction, as dubbed by Friedman and Schwartz, 1963) of the 1930s.
Abstract The impact of changes in real interest rates on saving and growth is a central issue in ... more Abstract The impact of changes in real interest rates on saving and growth is a central issue in development economics. According to one familiar view, a financial liberalization program which increases real interest rates should encourage saving, thereby boosting investment and growth. While such liberalizations have indeed typically succeeded in raising real interest rates, their impact on private saving has been mixed.
В статье на основе пробит-моделирования выделены опережающие экономические индикаторы для прогноз... more В статье на основе пробит-моделирования выделены опережающие экономические индикаторы для прогнозирования финансового кризиса для стран СНГ. Полученные результаты могут быть использованы государственными органами для проведения мониторинга финансовой нестабильности экономики и своевременного реагирования.
Since 1990 capital has flowed from industrial countries to developing regions like Latin America,... more Since 1990 capital has flowed from industrial countries to developing regions like Latin America, and parts of Asia. Reentry into international capital markets is a welcome turn of events for most countries. However, capital inflows are often associated with inflationary pressures, a real exchange rate appreciation, a deterioration in the current account, and a boom in bank lending. This paper briefly examines how these inflows have altered the macroeconomic environment in a number of Asian and Latin American countries.
Comments on: Alan Drazen, whose paper represents a first effort to formalize the role of politica... more Comments on: Alan Drazen, whose paper represents a first effort to formalize the role of political considerations in the process of how currency crises are transmitted across international borders. The theoretical literature on “contagion” is scarce, and the empirical literature equally so.
The signals approach was applied to 24 of the indicators around the dates of the 29 banking and t... more The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the robustness of their results as to the individual performance of the indicators. In particular, the sample size has been expanded by including 26 years worth of data for an additional five countries.
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Papers by Carmen M Reinhart