{
  "title": "Moral Hazard and International Crisis Lending: A Test",
  "publication": "IMF Working Papers, October 1, 2002",
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  "summary": "We test for the existence of a moral hazard effect attributable to official crisis lending by analyzing the evolution of sovereign bond spreads in emerging markets before and after the Russian crisis.",
  "sections": [
    {
      "heading": "Research question and context",
      "content": "- Test for the existence of a moral hazard effect attributable to official crisis lending by analyzing the evolution of sovereign bond spreads in emerging markets before and after the Russian crisis.\n- The nonbailout of Russia in August 1998 is interpreted as an event that decreased the perceived probability of future crisis lending to emerging markets.\n- Hypothesized implications in the presence of moral hazard:\n  - A rise in the level of sovereign bond spreads.\n  - An increase in the sensitivity with which spreads reflect fundamentals.\n  - An increase in cross-country dispersion of spreads."
    },
    {
      "heading": "Data and empirical approach",
      "content": "- Analysis focuses on sovereign bond spreads in emerging markets, comparing behavior before and after the Russian crisis (nonbailout in August 1998).\n- The study examines three distinct measurable effects tied to moral hazard (level, sensitivity to fundamentals, cross-country dispersion)."
    },
    {
      "heading": "Key findings",
      "content": "- The authors report strong evidence for all three predicted effects:\n  - Higher levels of sovereign bond spreads after the perceived decrease in crisis lending probability.\n  - Greater sensitivity of spreads to fundamentals following the event.\n  - Increased cross-country dispersion of spreads after the event.\n\n---\n\n Content in this bundle\n\n- 137096\n  - 137096 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 137096 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/moral-hazard-and-international-crisis-lending-a-test-16125"
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    "Authors: Giovanni Dell'Ariccia, Jeromin Zettelmeyer, Isabel Schnabel",
    "Published: October 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451859201.001",
    "Test for the existence of a moral hazard effect attributable to official crisis lending by analyzing the evolution of sovereign bond spreads in emerging markets before and after the Russian crisis.",
    "The nonbailout of Russia in August 1998 is interpreted as an event that decreased the perceived probability of future crisis lending to emerging markets.",
    "Hypothesized implications in the presence of moral hazard:",
    "Analysis focuses on sovereign bond spreads in emerging markets, comparing behavior before and after the Russian crisis (nonbailout in August 1998).",
    "The study examines three distinct measurable effects tied to moral hazard (level, sensitivity to fundamentals, cross-country dispersion).",
    "The authors report strong evidence for all three predicted effects:",
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