Getting Shut Out of the International Capital Markets: It Doesn't Take Much

Nancy P. Marion, Robert P. Flood
2006 IMF Working Papers  
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. We use a simple model of international lending to show that an emerging market borrower who might default can be shut out of international capital markets without
more » ... arning. A modest haircut on obligations, for example, can shut down lending. JEL Classification Numbers: F34
doi:10.5089/9781451864045.001 fatcat:56uoreukafdanc2ix4cjjjm5va