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Market Countries (market + country)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	90%

Selected Abstracts

Exchange Rate Volatility and Democratization in Emerging Market Countries

INTERNATIONAL STUDIES QUARTERLY, Issue 2 2003
Jude C. Hays
We examine some of the consequences of financial globalization for democratization in emerging market economies by focusing on the currency markets of four Asian countries at different stages of democratic development. Using political data of various kinds,including a new events data series,and the Markov regime switching model from empirical macroeconomics, we show that in young and incipient democracies politics continuously causes changes in the probability of experiencing two different currency market equilibria: a high volatility "contagion" regime and a low volatility "fundamentals" regime. The kind of political events that affect currency market equilibration varies cross-nationally depending on the degree to which the polity of a country is democratic and its policymaking transparent. The results help us better gauge how and the extent to which democratization is compatible with financial globalization. [source]

European industry: the emerging market competitiveness challenge

ECONOMIC OUTLOOK, Issue 3 2006
Article first published online: 24 AUG 200
As the global economy has become increasingly open to 'free' trade, European industry - and, indeed, industry across the developed world - has found itself faced with growing competition from low cost, emerging market countries. How is it facing up to this stiff challenge? Newspaper headlines may suggest that effort has been focused on raising trade barriers to keep competition at bay. However, such actions are a thin veneer over the very real, structural changes that are rapidly taking place. This article, by Grant Colquhoun, examines the changing structure of the EU15's trading patterns and the differential impact across manufacturing sectors. It then analyses the steps industry is taking to cope with the competitiveness challenge. As well as attempting to squeeze costs, it is clear that industry in Europe is restructuring in order to focus on higher value added activities, where it typically has a competitive advantage over emerging markets. [source]

International Financial Rescues and Debtor-Country Moral Hazard,

INTERNATIONAL FINANCE, Issue 3 2004
Prasanna Gai
This paper examines whether recent international policy initiatives to facilitate financial rescues in emerging market countries have influenced debtors' incentives to access official sector resources. The paper highlights a country's systemic importance as a key characteristic that drives access to official sector finance. It estimates the effect of these financial rescue initiatives on IMF programme participation using a pooled probit model. The safety net permitting exceptional access is shown to have a greater marginal impact on official sector resource usage, the more systemically important the debtor country. The results can be interpreted as offering some support for the presence of debtor-country moral hazard. [source]

Identifying the Role of Moral Hazard in International Financial Markets

INTERNATIONAL FINANCE, Issue 1 2004
Steven B. Kamin
Abstract Considerable attention has been paid to the possibility that large-scale IMF-led financing packages may have distorted incentives in international financial markets, leading private investors to provide more credit to emerging market countries, and at lower interest rates, than might otherwise have been the case. Yet, prior attempts to identify such distortions have yielded mixed evidence, at best. This paper makes three contributions to our ability to assess the empirical importance of moral hazard in international financial markets. First, it is argued that, because large international ,bail-outs' did not commence until the 1995 Mexican crisis, financial indicators prior to that time could not have reflected a significant degree of this type of moral hazard. Therefore, one test for the existence of moral hazard is that the access of emerging markets to international credit is significantly easier than it was prior to 1995. Second, the paper argues that because private investors expect large-scale IMF-led packages to be extended primarily to economically or geo-politically important countries, moral hazard, if it exists, should lead these countries to have easier terms of access to credit than smaller, non-systemically important countries. Finally, in addition to looking at bond spreads, the focus of earlier empirical analyses of moral hazard, the paper also examines trends in capital flows to gauge the access of emerging market countries to external finance. Looking at the evidence in light of these considerations, the paper concludes that there is little support for the view that moral hazard is significantly distorting international capital markets at the present time. [source]

The contribution of domestic and external factors to emerging market currency crises: an early warning systems approach,

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 3 2007
Steven B. Kamin
Abstract In this paper, a modified ,early warning system' (EWS) approach is developed to identify the roles of domestic and external factors in emerging market crises. Several probit models of currency crises were estimated for 26 emerging market countries. These models were used to identify the separate contributions to the probabilities of crisis of domestic and external variables. We found that, relative to domestic factors, adverse external shocks and large external imbalances contributed little to the average estimated probability of crisis in emerging market countries, but accounted for much more of the spikes in the probability of crisis estimated to occur during actual crisis years. We interpret these results to suggest that while, on average over time, domestic factors have tended to contribute to much of the underlying vulnerability of emerging market countries, adverse swings in external factors may have been important in pushing economies ,over the edge' and into currency crisis. In consequence, the costs of giving up exchange rate flexibility through adoption of strongly fixed exchange rate regimes,e.g. currency boards or dollarization,may be quite high for some countries. Published in 2007 by John Wiley & Sons, Ltd. [source]

What sustains fiscal consolidations in emerging market countries?

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 4 2005
Sanjeev Gupta
Abstract This paper examines the factors affecting the persistence of fiscal consolidation in 25 emerging market countries during 1980,2001. It proposes a new approach for defining spells of fiscal consolidation. The results indicate that the probability of ending a fiscal adjustment is affected by the legacy of previous fiscal failures, the size of the deficit, the composition of spending and level of total revenues. There is also some evidence that the initial debt stock, exchange rate developments, inflation and the unemployment rate have an impact on the persistence of adjustments. Copyright © 2005 John Wiley & Sons, Ltd. [source]

THE PURCHASING POWER PARITY PERSISTENCE PUZZLE: EVIDENCE FROM BLACK MARKET REAL EXCHANGE RATES,

THE MANCHESTER SCHOOL, Issue 4 2008
MARIO CERRATO
In this paper we analyse the purchasing power parity (PPP) persistence puzzle using a unique data set of black market real exchange rates for 36 emerging market economies and (exact and approximate) median unbiased univariate and panel estimation methods. We construct bootstrap confidence intervals for the half-lives, as well as exact quantiles of the median function for different significance levels using Monte Carlo simulation. Even after accounting for a number of econometric issues, the PPP persistence puzzle is still a striking characteristic of the majority of emerging market countries. However, in a minority of exchange rates, the PPP puzzle is removed. [source]