Original Sin Mystery Trinity and Unequal Blessings
We investigate whether the fact that most countries cannot borrow internationally in their own currencies, referred to as “original sin” by Eichengreen and Hausmann (1999), may remain as a “mystery” when an alternative variable set and estimation procedure are taken into account. Our results suggest that flexible exchange rates and strong macroeconomic policy stance with sound institutions are necessary but not sufficient for redemption from original sin. Original sin appears to be persistent and determined also by the variables which are beyond the sole control of individual countries. Consequently, redemption from it and satisfying the blessed trinity of international currency, flexible exchange rates and sound institutions requires a new international financial system allowing complete markets for all currencies meeting the necessary conditions.
|Date of creation:||Oct 2004|
|Date of revision:||Oct 2004|
|Contact details of provider:|| Postal: |
Phone: +90 (312) 210 2003
Fax: (312) 210 1244
Web page: http://www.erc.metu.edu.tr
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- de la Torre, Augusto & Levy Yeyati, Eduardo & Schmukler, Sergio L, 2002.
"Financial Globalization: Unequal Blessings,"
Wiley Blackwell, vol. 5(3), pages 335-57, Winter.
- Augusto de la Torre & Eduardo Levy Yeyati & Sergio L. Schmukler, 2002. "Financial globalization: Unequal blessings," Business School Working Papers veintinueve, Universidad Torcuato Di Tella.
- De la Torre, Augusto & Levy Yeyati, Eduardo & Schmukler, Sergio L., 2002. "Financial globalization : unequal blessings," Policy Research Working Paper Series 2903, The World Bank.
- Obstfeld, Maurice, 2004.
"Globalization, Macroeconomic Performance, and the Exchange Rates of Emerging Economies,"
Center for International and Development Economics Research, Working Paper Series
qt7q670769, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Maurice Obstfeld, 2004. "Globalization, Macroeconomic Performance, and the Exchange Rates of Emerging Economies," NBER Working Papers 10849, National Bureau of Economic Research, Inc.
- Barry Eichengreen & Ricardo Hausmann & Ugo Panizza, 2003. "Currency Mismatches, Debt Intolerance and Original Sin: Why They Are Not the Same and Why it Matters," NBER Working Papers 10036, National Bureau of Economic Research, Inc.
- Greene, William, 1999.
"Marginal effects in the censored regression model,"
Elsevier, vol. 64(1), pages 43-49, July.
- Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003.
NBER Working Papers
9908, National Bureau of Economic Research, Inc.
- Hausmann, Ricardo & Panizza, Ugo, 2003. "On the determinants of Original Sin: an empirical investigation," Journal of International Money and Finance, Elsevier, vol. 22(7), pages 957-990, December.
- Ronald McKinnon & Gunther Schnabl, 2004.
"The East Asian Dollar Standard, Fear of Floating, and Original Sin,"
Review of Development Economics,
Wiley Blackwell, vol. 8(3), pages 331-360, 08.
- Ronald McKinnon & Gunther Schnabl, 2003. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Working Papers 03001, Stanford University, Department of Economics.
- Ronald McKinnon & Gunther Schnabl, 2003. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Working Papers 112003, Hong Kong Institute for Monetary Research.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2002.
"The Modern History of Exchange Rate Arrangements: A Reinterpretation,"
NBER Working Papers
8963, National Bureau of Economic Research, Inc.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 1-48, February.
- Reinhart, Carmen & Rogoff, Kenneth, 2004. "The modern history of exchange rate arrangements: A reinterpretation," MPRA Paper 14070, University Library of Munich, Germany.
- McKinnon, Ronald I., 2004. "The East Asian dollar standard," China Economic Review, Elsevier, vol. 15(3), pages 325-330.
- repec:rus:hseeco:123922 is not listed on IDEAS
- repec:rus:hseeco:181565 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:met:wpaper:0415. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Erol Taymaz)
If references are entirely missing, you can add them using this form.