Title International debt and the price of domestic assets / Leonardo Auernheimer and Roberto Garcia-Saltos

Published [Washington, D.C.] : International Monetary Fund, IMF Institute, ©2000

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Description 1 online resource (28 pages) : illustrations Series IMF working paper ; WP/00/177 IMF working paper ; WP/00/177. Summary This paper examines the behavior of indebtedness, consumption, and asset prices in a small open economy in which the foreign real interest rate depends not only on an exogenous world interest rate and on indebtedness, but also on the value of the capital stock, viewed as an implicit "collateral," and hence on the price of capital. The paper finds that the collateral effect magnifies the intensity of shocks to the economy and the duration of their impact. The collateral effect also generates additional distortions that could lead to overborrowing. The paper discusses the policy responses to these distortions Bibliography Includes bibliographical references (pages 27-28) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Debts, External -- Small states -- Econometric models Current assets -- Valuation -- Small states -- Econometric models Capital stock -- Small states -- Econometric models -- Costs Credit -- Small states -- Econometric models Loans -- Small states -- Econometric models Debts, Public -- Econometric models Current assets -- Econometric models Capital stock -- Costs -- Econometric models Credit -- Econometric models Debts, Public -- Econometric models Credit -- Econometric models Credit Debts, External Loans Form Electronic book Author Garcia-Saltos, Roberto International Monetary Fund. IMF Institute.

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