Credit Rationing in Emerging Economies' Access to Global Capital Markets

Author/Editor:

Edda Zoli

Publication Date:

April 1, 2004

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper tests empirically the theoretical prediction that the country premium paid by emerging economies on sovereign debt increases with the amount of debt up to a certain critical level, above which the supply of foreign funds becomes fixed. The results confirm this theoretical prediction. The approach developed in the paper is also used to test for the presence of moral hazard in international lending. The results indicate significant changes in the supply of funds curve consistent with the presence of moral hazard in the period immediately following the Mexican rescue operation, but not after the Russian non-bailout.

Series:

Working Paper No. 04/70

Subject:

English

Publication Date:

April 1, 2004

ISBN/ISSN:

9781451849189/1018-5941

Stock No:

WPIEA0702004

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

30

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