Developing countries' borrowing in the international financial market with an uncertain credit ceiling?

Autor:	Alberto Isgut
Rok vydání:	2001
Předmět:	Macroeconomics Economics and Econometrics media_common.quotation_subject Financial market Developing country Monetary economics Current account Ceiling (cloud) Certainty Accounting Economics External financing Sovereign debt Finance media_common
Zdroj:	International Journal of Finance & Economics. 6:171-183
ISSN:	1099-1158 1076-9307
DOI:	10.1002/ijfe.153
Popis:	In the sovereign debt literature of the 1980s, countries formulated optimal borrowing plans subject to a credit ceiling imposed by their lenders. This paper analyzes the case where the credit ceiling is not known with certainty. The baseline deterministic model shows that consumption, investment and the current account deficit depend positively on the credit ceiling, implying more optimistic expectations about the country's future access to external financing led to larger current account deficits today. An extension of the model shows that when the country recognizes the uncertainty about future access to borrowing, optimal current account deficits are more moderate. Copyright © 2001 John Wiley & Sons, Ltd.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::4b08c96cef3d640b8922ef55d9d4aa77 https://doi.org/10.1002/ijfe.153 Zobrazit plný text záznamu Plný text ve formátu PDF