International Financial Contagion and the Fund : A Theoretical Framework /
We provide a model of contagion where countries borrow or lend for consumption smoothing at the market interest rate or a lower IMF rate. Highly indebted countries hit by large negative shocks to output will default. The resulting reduction in loanable funds raises interest rates, increases the vuln...
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| Format: | Book |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
2001
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| Series: | IMF Working Papers ;
Working Paper No. 01/137 IMF eLibrary |
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