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Getting Shut Out of the International Capital Markets - It Doesn’t Take Much

Author

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  • Ms. Nancy P. Marion
  • Mr. Robert P Flood

Abstract

We use a simple model of international lending to show that an emerging market borrower who might default can be shut out of international capital markets without warning. A modest haircut on obligations, for example, can shut down lending.

Suggested Citation

  • Ms. Nancy P. Marion & Mr. Robert P Flood, 2006. "Getting Shut Out of the International Capital Markets - It Doesn’t Take Much," IMF Working Papers 2006/144, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/144
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    References listed on IDEAS

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    1. Molina, Danielken & Roa, Monica, 2014. "The Effect of Credit on the Export Performance of Colombian Exporters," MPRA Paper 56137, University Library of Munich, Germany.
    2. repec:rus:hseeco:123922 is not listed on IDEAS
    3. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003. "Debt Intolerance," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 1-74.
    4. Gai, Prasanna & Hayes, Simon & Shin, Hyun Song, 2004. "Crisis costs and debtor discipline: the efficacy of public policy in sovereign debt crises," Journal of International Economics, Elsevier, vol. 62(2), pages 245-262, March.
    5. Guillermo A. Calvo & Alejandro Izquierdo & Luis-Fernando Mejía, 2004. "On the Empirics of Sudden Stops: The Relevance of Balance-Sheet Effects," NBER Working Papers 10520, National Bureau of Economic Research, Inc.
    6. Joshua Aizenman & Nancy Marion, 2004. "International Reserve Holdings with Sovereign Risk and Costly Tax Collection," Economic Journal, Royal Economic Society, vol. 114(497), pages 569-591, July.
    7. Luis Catão & Sandeep Kapur, 2006. "Volatility and the Debt-Intolerance Paradox," IMF Staff Papers, Palgrave Macmillan, vol. 53(2), pages 1-1.
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    Cited by:

    1. Atish R. Ghosh & Jun I. Kim & Enrique G. Mendoza & Jonathan D. Ostry & Mahvash S. Qureshi, 2013. "Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies," Economic Journal, Royal Economic Society, vol. 0, pages 4-30, February.
    2. Oronde Small & Leanora Brown & Gustavo Canavire‐Bacarreza, 2020. "The Fiscal Policy Response To Public Debt In Developing Countries," Contemporary Economic Policy, Western Economic Association International, vol. 38(1), pages 155-165, January.
    3. Mr. Jun I Kim, 2007. "Unconditional IMF Financial Support and Investor Moral Hazard," IMF Working Papers 2007/104, International Monetary Fund.

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