Essays in emerging market crisis: The role of sovereign debt. Mathew Brent Bradbury

ISBN: 9780549652618

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105 pages


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Essays in emerging market crisis: The role of sovereign debt.  by  Mathew Brent Bradbury

Essays in emerging market crisis: The role of sovereign debt. by Mathew Brent Bradbury
| NOOKstudy eTextbook | PDF, EPUB, FB2, DjVu, talking book, mp3, RTF | 105 pages | ISBN: 9780549652618 | 7.50 Mb

This dissertation is an inquiry focused on the role of the sovereign debt structure in currency crisis. The work explores this topic through the lens of canonical literature and leverages this reading in both theoretical and empiricalMoreThis dissertation is an inquiry focused on the role of the sovereign debt structure in currency crisis.

The work explores this topic through the lens of canonical literature and leverages this reading in both theoretical and empirical exercises.-Three questions guide the work. First, what are the channels and dynamics through which debt structure contributes to currency crisis? Second, in the current climate of surging capital flows, what debt-based strategies might be employed to minimize this vulnerability?

Third, how have pernicious debt dynamics manifested in recent episodes of crisis? The thesis proceeds in three chapters.-Chapter 1 surveys the canonical literature on the mechanics of currency crisis. It explores the established architecture of crisis within which a role of sovereign debt must be embedded. Chapter 1 concludes with the notion that although sovereign debt may not be essential to deriving a working model of currency crisis, considering the role of sovereign debt structure may help attune such models by improving understanding of the timing and vulnerability to speculative attack.-Chapter 2 assesses the current trend of accumulation of large stockpiles of reserves as self-insurance against external shocks.

A theoretical model is developed to assess common strategies for reducing vulnerability, reserve accumulation versus debt restructuring. The model shows that when pernicious characteristics of debt are prevalent, reducing the likelihood of a self-fullfilling crisis can be achieved through addressing the structure of debt.-Chapter 3 provides a case study of the debt structure of Argentina and its role in the 2001 currency-debt crisis.

The chapter continues by viewing the evolution of the public debt structure in the postcrisis years through 2006 in order to discern the impact of radical restructuring methods. Pesification and default have reduced vulnerabilities inherent in the debt structure.-The thesis argues that addressing emerging market vulnerability to crisis requires addressing the structure of the debt.

Prevalence of pernicious forms of debt is an outcome of a historical process of interacting with flawed international capital markets. For this reason, directed reform of international capital markets is essential to reducing vulnerabilities over the long term.



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