Liability dollarization and the bank balance sheet channel

Journal of International Economics

Volumn 64, Issue 2, 2004, Pages 247-275

  Choi, Woon Gyu ^a   Cook, David ^b  

^a INTERNATIONAL MONETARY FUND   (United States)

^b HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY   (Hong Kong)

Author keywords

Bank balance sheet channel; Exchange rate depreciation; Foreign currency debt; Sticky prices

Indexed keywords

BANKING; LIABILITY;

EID: 17544383351     PISSN: 00221996     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jinteco.2003.08.009     Document Type: Article

References (66)

1. Aghion P. Bacchetta P. Banerjee A. A simple model of monetary policy and currency crises European Economic Review 44 2000 728-738
2. Aghion P. Bacchetta P. Banerjee A. Currency crises and monetary policy in an economy with credit constraints European Economic Review 45 2001 1121-1150
3. Arellano, C., Mendoza, E.G., 2002. Credit frictions and 'sudden stops' in small open economies: An equilibrium business cycle framework for emerging markets crises. NBER Working Paper No. 8880.
4. Backus D.K. Kehoe P.J. Kydland F.E. International real business cycles Journal of Political Economy 100 1992 745-775
5. Arrelano,C., Mendoza, EG., 2002. Credit friction and 'suddem stop' economies: An equilibrium business cycle framework for emerging markets crises. NBER Working Paper No. 8880.a
6. Bernanke B. Gertler M. Agency costs, net worth, and business fluctuations American Economic Review 79 1989 14-31
7. Bernanke B. Gertler M. Financial fragility and economic performance Quarterly Journal of Economics 105 1990 87-114
8. Bernanke B. Gertler M. Gilchrist S. The financial accelerator in a quantitative business cycle framework In: Taylor J. Woodford M. (Eds.), Handbook of Macroeconomics 1999 North-Holland Elsevier Press Amsterdam
9. Burnside C. Eichenbaum M. Rebelo S. Hedging and financial fragility in fixed exchange rate regimes European Economic Review 45 2001 1151-1193
10. Calvo G.A. Staggered prices in a utility-maximizing framework Journal of Monetary Economics 12 1983 383-398
11. Calvo G.A. Capital flows and capital-market crises: The simple economics of sudden stops Journal of Applied Economics 1 1998 35-54
12. Calvo, G.A. 2000. Notes on Price Stickness: With Special Reference to Liability Dollarization and Credebility. Mmeo, University of Maryland
13. Calvo G.A. On dollarization Economics of Transition 10 2002 393-403
14. Calvo, G.G., Reinhart, C., 2000. fixing for your life. NBER Working Paper No. 8006
15. Calvo G.A. Reinhart C. Fear of floating Quarterly Journal of Economics 117 2002 379-408
16. Carlstrom C.T. Fuerst T.S. Agency costs, net worth, and business fluctuations: A computable general equilibrium analysis American Economic Review 87 1997 893-910
17. Carlstrom C.T. Fuerst T.S. Agency costs and business cycles Economic Theory 12 1998 583-597
18. Carlstrom C.T. Fuerst T.S. Monetary shocks, agency costs, and business cycles Carnegie-Rochester Conference Series on Public Policy 54 2001 1-27
19. Céspedes L.F., 2000. Credit Constraints and Macroeconomic Instability in a Small Open Economy. Mimeo, New York University.
20. Céspedes, L.F., Chang, R., Velasco, A., 2000. Balance sheets and exchange rate policy. Mimeo, Rutgers University.
21. Chang R. Velasco A. Liquidity crises in emerging markets: Theory and policy In: Bernanke B.S. Rotemberg J.J. (Eds.), NBER Macroeconomics Annual 1999 1999 11-58 MIT Press Cambridge
22. Chen N.K. Bank net worth, asset prices, and economic activity Journal of Monetary Economics 48 2001 415-436
23. Chinn, M.D., Kletzer, K.M., 2000. International capital inflows, domestic financial intermediation and financial crises under imperfect information. NBER Working Paper No. 7902.
24. Christiano L.J. Eichenbaum M. Evans C.L. Sticky price and limited participation models of money: A comparison European Economic Review 41 1997 1201-1249
25. Christiano, L.J., Gust, C., Roldos, J., 2002. Monetary policy in a financial crisis. NBER Working Paper No. 9005.
26. Cho J.O. Cooley T.F. Phaneuf L. The welfare cost of nominal wage contracting Review of Economic Studies 64 1997 465-484
27. Cogley T. Nason J.M. Output dynamics in real-business-cycle models American Economic Review 85 1995 492-509
28. Cook, D., 2000. Monetary policy in emerging markets: Can liability dollarization explain contractionary devaluations? Mimeo. Hong Kong University of Science and Technology.
29. Cook, D., Devereux, M.B., 2001. The macroeconomic effects of international financial panics. Mimeo, Hong Kong University of Science and Technology
30. Devereux, M.B., 2001. Financial constraints and exchange rate flexibility in emerging market economies. Hong Kong Institute for Monetary Research Working Paper No. 15/2001
31. Devereux, M.B., Lane, P., 2000. Exchange rate flexibility and monetary policy choices for emerging market economies. Hong Kong Institute for Monetary Research Working Paper
32. Edwards S. Végh C.A. Banks and macroeconomic disturbances under predetermined exchange rates Journal of Monetary Economics 40 1997 239-278
33. Eichengreen B. Hausmann R. Exchange rates and financial fragility New Challenges for Monetary Policy 1999 329-368 Federal Reserve Bank of Kansas City Kansas City
34. Epstein L.G. Stationary cardinal utility and optimal growth under uncertainty Journal of Economic Theory 31 1983 133-152
35. Faia, E., Monacelli, T., 2002. Financial exposure, exchange rate regime, and fear of floating. Mimeo, Boston College
36. Fuerst T.S. Monetary and financial interactions in the business cycle Journal of Money, Credit and Banking 27 1995 1321-1338
37. Gale D. Hellwig M. Incentive-compatible debt contracts: The one-period problem Review of Economic Studies 52 1985 647-663
38. Galí J. Gertler M. Inflation dynamics: A structural econometric analysis Journal of Monetary Economics 44 1999 195-222
39. Galí, J., Monacelli, T., 2002. Monetary policy and exchange rate volatility in a small open economy. NBER Working Paper No. 8905.
40. Gertler M. Gilchrist S. Natalucci F. External Constraints on Monetary Policy and the Financial Accelerator. Mimeo 2000 Boston University
41. Ghosh, A., Lane, T., Schulze-Ghattas, M., Bulír, A., Hamann, J., Mourmouras, A.A., 2002. IMF-supported programs in capital account crises. International Monetary Fund Occasional Paper No. 210.
42. Greenwood J. Williamson S.D. International financial intermediation and aggregate fluctuations under alternative exchange rate regimes Journal of Monetary Economics 23 1989 401-431
43. Greenwood J. Hercowitz Z. Huffman G.W. Investment, capacity utilization, and the real business cycle American Economic Review 78 1988 402-417
44. Holmstrom B. Tirole J. Financial intermediation, loanable funds, and the real sector Quarterly Journal of Economics 112 1997 663-691
45. Ize A. Levy-Yeyati E. Dollarization of financial intermediation: causes and policy implications Journal of International Economics 59 2003 323-347
46. King R.G. Watson M.W. Systems reduction and solution algorithm for singular linear difference systems under rational expectations Computational Economics 20 2002 57-86
47. Kiyotaki N. Moore J. Credit cycles Journal of Political Economy 105 1997 211-248
48. Krugman P. Balance sheets, the transfer problem, and financial crises In: Isard P. Razin A. Rose A.K. (Eds.), International Finance and Financial Crises: Essays in Honor of Robert P. Flood, Jr 2000 31-44 Kluwer Academic Boston
49. Lane P.R. Milesi-Ferretti G. The external wealth of nations: measures of foreign assets and liabilities for industrial and developing countries Journal of International Economics 55 2001 263-294
50. Lucas R.E.Jr. Models of Business Cycles: Yrjo Jahnsson Lectures Series 1987 Blackwell London and New York
51. Mendoza E.G. Real business cycles in a small open economy American Economic Review 81 1991 797-818
52. Mendoza E.G. The benefits of dollarization when stabilization policy lacks credibility and financial markets are imperfect Journal of Money Credit and Banking 33 2001 440-474
53. Mendoza E.G. Uribe M. Devaluation risk and the business-cycle implications of exchange-rate management Carnegie-Rochester Conference Series on Public Policy 53 2000 239-296
54. Meesook, K., Lee, I.H., Liu, O., Khatri, Y., Tamirisa, N., Moore, M., Krysl, M.H., 2001. Malaysia: From crisis to recovery. International Monetary Fund Occasional Paper No. 207.
55. Monacelli T. Into the Mussa puzzle: Monetary policy regimes and the real exchange rate in a small open economy Journal of International Economics 62 2004 191-217
56. Obstfeld M. Rogoff K. Exchange rate dynamics redux Journal of Political Economy 103 1995 624-660
57. Oviedo, P.M., 2003. Macroeconomic risk and banking crises in emerging market countries: Business fluctuations with financial crashes. Mimeo, North Carolina State University.
58. Rotemberg J.J. Woodford M. An optimization based econometric framework for the evaluation of monetary policy In: Bernanke B.S. Rotemberg J.J. NBER (Eds.), Macroeconomics Annual 1997 1997 297-345 MIT Press Cambridge and London
59. Schmitt-Grohé S. Uribe M. Stabilization policy and the costs of dollarization Journal of Money Credit and Banking 33 2001 482-509
60. Schneider, M., Tornell, A., 2000. Balance sheet effects, bailout guarantees and financial crisis. NBER Working Paper No. 8060.
61. Taylor J.B. (Ed.), Monetary Policy Rules 1999 University of Chicago Press Chicago
62. Townsend R.M. Optimal contracts and competitive markets with costly state verification Journal of Economic Theory 21 1979 265-293
63. Williamson S.D. Financial intermediation, business failures, and real business cycles Journal of Political Economy 95 1987 1196-1216
64. Woodford M. The Taylor rule and optimal monetary policy American Economic Review 91 2001 232-237
65. Yun T. Nominal price rigidity, money supply endogeneity, and business cycles Journal of Monetary Economics 37 1996 345-370
66. Zimmermann, C., 1994. Technology innovations and the volatility of output: An international perspective. L' Université du Québec à Montréal Working Paper.