Liquidity risk aversion, debt maturity, and current account surpluses: a theory and evidence from East Asia
The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When the go...
Gespeichert in:
| Hauptverfasser: | , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2007
|
| Schriftenreihe: | Working paper series / National Bureau of Economic Research
13004 |
| Online-Zugang: | Volltext |
| Zusammenfassung: | The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When the government keeps foreign reserves constant, an increased aversion to liquidity risk reduces liquid debt and increases illiquid debt. However, its macroeconomic impacts are not large, causing only small current account surpluses. In contrast, when the government responds to the shock, the changed aversion increases foreign reserves and may lead to a rise of liquidity debt. In particular, under some reasonable parameter set, it causes large macroeconomic impacts, including significant current account surpluses. In the second part, we provide several empirical supports to the implications. In particular, we explore how foreign debt maturity structures changed in East Asia. We find that many East Asian economies reduced short-term borrowings temporarily after the crisis but increased short-term borrowings in the early 2000s. We discuss that our results have important implications for the recent deterioration in the U.S. current account. |
| Beschreibung: | 30 S. graph. Darst. 22 cm |
Internformat
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| 245 | 1 | 0 | |a Liquidity risk aversion, debt maturity, and current account surpluses |b a theory and evidence from East Asia |c Shin-ichi Fukuda ; Yoshifumi Kon |
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| 520 | 8 | |a The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When the government keeps foreign reserves constant, an increased aversion to liquidity risk reduces liquid debt and increases illiquid debt. However, its macroeconomic impacts are not large, causing only small current account surpluses. In contrast, when the government responds to the shock, the changed aversion increases foreign reserves and may lead to a rise of liquidity debt. In particular, under some reasonable parameter set, it causes large macroeconomic impacts, including significant current account surpluses. In the second part, we provide several empirical supports to the implications. In particular, we explore how foreign debt maturity structures changed in East Asia. We find that many East Asian economies reduced short-term borrowings temporarily after the crisis but increased short-term borrowings in the early 2000s. We discuss that our results have important implications for the recent deterioration in the U.S. current account. | |
| 700 | 1 | |a Kon, Yoshifumi |e Verfasser |0 (DE-588)133202194 |4 aut | |
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| 810 | 2 | |a National Bureau of Economic Research <Cambridge, Mass.> |t NBER working paper series |v 13004 |w (DE-604)BV002801238 |9 13004 | |
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| illustrated | Illustrated |
| index_date | 2024-07-02T22:41:31Z |
| indexdate | 2024-07-09T21:25:14Z |
| institution | BVB |
| language | English |
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| physical | 30 S. graph. Darst. 22 cm |
| publishDate | 2007 |
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| publisher | National Bureau of Economic Research |
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| spelling | Fukuda, Shin'ichi 1960- Verfasser (DE-588)132336995 aut Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia Shin-ichi Fukuda ; Yoshifumi Kon Cambridge, Mass. National Bureau of Economic Research 2007 30 S. graph. Darst. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 13004 The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When the government keeps foreign reserves constant, an increased aversion to liquidity risk reduces liquid debt and increases illiquid debt. However, its macroeconomic impacts are not large, causing only small current account surpluses. In contrast, when the government responds to the shock, the changed aversion increases foreign reserves and may lead to a rise of liquidity debt. In particular, under some reasonable parameter set, it causes large macroeconomic impacts, including significant current account surpluses. In the second part, we provide several empirical supports to the implications. In particular, we explore how foreign debt maturity structures changed in East Asia. We find that many East Asian economies reduced short-term borrowings temporarily after the crisis but increased short-term borrowings in the early 2000s. We discuss that our results have important implications for the recent deterioration in the U.S. current account. Kon, Yoshifumi Verfasser (DE-588)133202194 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 13004 (DE-604)BV002801238 13004 http://papers.nber.org/papers/w13004.pdf kostenfrei Volltext |
| spellingShingle | Fukuda, Shin'ichi 1960- Kon, Yoshifumi Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia |
| title | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia |
| title_auth | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia |
| title_exact_search | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia |
| title_exact_search_txtP | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia |
| title_full | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia Shin-ichi Fukuda ; Yoshifumi Kon |
| title_fullStr | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia Shin-ichi Fukuda ; Yoshifumi Kon |
| title_full_unstemmed | Liquidity risk aversion, debt maturity, and current account surpluses a theory and evidence from East Asia Shin-ichi Fukuda ; Yoshifumi Kon |
| title_short | Liquidity risk aversion, debt maturity, and current account surpluses |
| title_sort | liquidity risk aversion debt maturity and current account surpluses a theory and evidence from east asia |
| title_sub | a theory and evidence from East Asia |
| url | http://papers.nber.org/papers/w13004.pdf |
| volume_link | (DE-604)BV002801238 |
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