Financial Crises Macroeconomic Shocks And The Government Balance Sheet A Panel Analysis

Author : Matteo Ruzzante
Publisher : International Monetary Fund
ISBN 13 : 1484352769
Total Pages : 55 pages
Book Rating : 4.62/5 ( download)

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Download or read book Financial Crises, Macroeconomic Shocks, and the Government Balance Sheet: A Panel Analysis written by Matteo Ruzzante and published by International Monetary Fund. This book was released on 2018-04-24 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Government financial assets are increasingly recognized as playing an important role in assessing fiscal sustainability. However, very little research has been done on the dynamics of government financial assets compared to liabilities. In this paper, we investigate the impact of recent financial crises and macroeconomic shocks on government balance sheets, decomposing the separate effects on financial assets and liabilities. Using quarterly Government Finance Statistics (GFS) data, we analyze a panel of 27 countries over the period 1999Q1-2017Q1 through fixed effects and panel VAR techniques. Financial crises are shown to deteriorate the net financial worth of governments, but no significant impact is found on assets suggesting that they are not being used as fiscal buffers in bad times. On the contrary, countries that suffered both financial and banking crises experienced an “artificial” increase of their asset position through bank bailouts. Macroeconomic shock analyses reveal that government balance sheet items are countercyclical, but important asymmetries are found in their dynamics.

Author : Matteo Ruzzante
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.37/5 ( download)

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Download or read book Financial Crises, Macroeconomic Schocks, and the Government Balance Sheet written by Matteo Ruzzante and published by . This book was released on 2018 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Government financial assets are increasingly recognized as playing an important role in assessing fiscal sustainability. However, very little research has been done on the dynamics of government financial assets compared to liabilities. In this paper, we investigate the impact of recent financial crises and macroeconomic shocks on government balance sheets, decomposing the separate effects on financial assets and liabilities. Using quarterly Government Finance Statistics (GFS) data, we analyze a panel of 27 countries over the period 1999Q1-2017Q1 through fixed effects and panel VAR techniques. Financial crises are shown to deteriorate the net financial worth of governments, but no significant impact is found on assets suggesting that they are not being used as fiscal buffers in bad times. On the contrary, countries that suffered both financial and banking crises experienced an “artificial” increase of their asset position through bank bailouts. Macroeconomic shock analyses reveal that government balance sheet items are countercyclical, but important asymmetries are found in their dynamics.

Author : Stefanie Walter
Publisher : Cambridge University Press
ISBN 13 : 1107028701
Total Pages : 273 pages
Book Rating : 4.08/5 ( download)

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Download or read book Financial Crises and the Politics of Macroeconomic Adjustments written by Stefanie Walter and published by Cambridge University Press. This book was released on 2013-10-31 with total page 273 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explains why governments respond differently to macroeconomic problems and why necessary reforms are sometimes delayed until a serious financial crisis erupts. It argues that voter vulnerability to different reform strategies varies, and that these vulnerabilities influence the type and timing of governments' policy responses to economic crises. Empirical analyses at both the individual level across a broad range of countries and case studies of national policy responses to financial and economic crises in Asia and Eastern Europe support the argument.

Author : Mr.Bas B. Bakker
Publisher : International Monetary Fund
ISBN 13 : 1498369944
Total Pages : 40 pages
Book Rating : 4.47/5 ( download)

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Download or read book Conventional and Insidious Macroeconomic Balance-Sheet Crises written by Mr.Bas B. Bakker and published by International Monetary Fund. This book was released on 2014-08-22 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper describes the anatomy of two types of balance-sheet macroeconomic crises. Conventional balance-sheet crises are triggered by external imbalances and balance sheet vulnerabilities. They typically occur after capital inflows have led to a substantial build up of foreign currency exposure. Insidious crises are triggered by internal imbalances and balance sheet vulnerabilities. They occur in high-growth economies when an initially equilibrating shift in relative prices and resources and credit in favor of the nontraded sector overshoots equilibrium. The paper argues that policymakers are now better able to forestall conventional crises, but they are much less capable of early detection and avoidance of insidious crises.

Author : Alexis Meyer-Cirkel
Publisher : International Monetary Fund
ISBN 13 : 1513574019
Total Pages : 58 pages
Book Rating : 4.11/5 ( download)

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Download or read book Balance Sheets and Debt Crises – Empirical Regularities for Modern Cases of Sovereign Distress written by Alexis Meyer-Cirkel and published by International Monetary Fund. This book was released on 2021-05-04 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public and private sector balance sheets are an important component to any analysis of debt sustainability. A vulnerable and indebted private sector can become a sudden liability for the government; alternatively, resilient household and bank balance sheets may reveal potential sources of funding for the sovereign during times of fiscal distress. In this paper, we document empirical regularities in the behavior of macroeconomic variables during debt crises, and show how both macroeconomic fundamentals and sectoral net worth can affect the likelihood of undergoing default.

Author : Brad Setser
Publisher : INTERNATIONAL MONETARY FUND
ISBN 13 : 9781451957150
Total Pages : 63 pages
Book Rating : 4.57/5 ( download)

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Download or read book A Balance Sheet Approach to Financial Crisis written by Brad Setser and published by INTERNATIONAL MONETARY FUND. This book was released on 2002-12-01 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper lays out an analytical framework for understanding crises in emerging markets based on examination of stock variables in the aggregate balance sheet of a country and the balance sheets of its main sectors (assets and liabilities). It focuses on the risks created by maturity, currency, and capital structure mismatches. This framework draws attention to the vulnerabilities created by debts among residents, particularly those denominated in foreign currency, and it helps to explain how problems in one sector can spill over into other sectors, eventually triggering an external balance of payments crisis. The paper also discusses the potential of macroeconomic policies and official intervention to mitigate the cost of such a crisis.

Author : Mark Allen
Publisher :
ISBN 13 :
Total Pages : 72 pages
Book Rating : 4.77/5 ( download)

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Download or read book A Balance Sheet Approach to Financial Crisis written by Mark Allen and published by . This book was released on 2002 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Melvyn Weeks
Publisher : INTERNATIONAL MONETARY FUND
ISBN 13 : 9781451857870
Total Pages : 37 pages
Book Rating : 4.7X/5 ( download)

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Download or read book Systemic Financial Crises, Balance Sheets, and Model Uncertainity written by Melvyn Weeks and published by INTERNATIONAL MONETARY FUND. This book was released on 2001-10-01 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically examines the probability and intensity of financial crises during the 1990s with a view to informing crisis prevention and mitigation policies. The econometric analysis uses a decision-theoretic approach, rather than the more standard general-to-specific approach, to address the high degree of model uncertainty. The results affirm the importance of balance sheets in the probability and intensity of financial crises, especially corporate balance sheet stresses and foreign exchange liquidity shortfalls. Model uncertainty is a bigger problem for estimating crisis intensity compared to crisis probability.

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
ISBN 13 : 1475561008
Total Pages : 66 pages
Book Rating : 4.05/5 ( download)

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Download or read book Financial Crises Explanations, Types, and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Author : Roberto Perrelli
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.59/5 ( download)

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Download or read book The Role of Corporate, Legal and Macroeconomic Balance Sheet Indicators in Crisis Detection and Prevention written by Roberto Perrelli and published by International Monetary Fund. This book was released on 2002-03 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study tests the recent balance sheet explanations of external crises in emerging market countries and the role of standards in these crises. Using several unique data sets, it finds that corporate sector balance sheets have a very significant impact on both the likelihood and depth of external crises. The indicators supplement, rather than substitute for traditional macroeconomic variables with standards playing potentially an important role. The results have implications for strategies to limit external vulnerability: they suggest that policymakers need to promote sound private sector financial structures, support sound shareholder rights, in addition to employing prudent macroeconomic policies to reduce exposure to crises. In sample predictions point to potentially large improvements in the predictive power of models that include these indicators.