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A Quantitative Model of International Lending of Last Resort

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dc.contributor.authorGete, Pedro
dc.contributor.authorMelkadze, Givi
dc.contributor.editorUribe, Martin
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2024-11-06T16:55:54Z
dc.date.available2024-11-06T16:55:54Z
dc.date.issued2020-03
dc.description.abstractWe analyze banking crises and lending of last resort (LOLR) in a quantitative model of financial frictions with bank defaults. LOLR policies generate a tradeoff between financial fragility (due to more highly leveraged banks) and milder crises since the policies are effective once in a crisis. In the calibrated model, the crisis mitigation effect dominates the moral hazard problem and the economy is better off having access to a lender of last resort. We characterize the conditions under which pools of small economies can be sustainable LOLRs. In addition, we assess the ability of China - a country with ample reserves - to be a sustainable international LOLR.
dc.description.peerreviewedyes
dc.description.statusPublished
dc.formatapplication/pdf
dc.identifier.citationGete, P., & Melkadze, G. (2020). A quantitative model of international lending of last resort. Journal of International Economics, 123, 103290. https://doi.org/10.1016/j.jinteco.2020.103290
dc.identifier.doihttps://doi.org/10.1016/j.jinteco.2020.103290
dc.identifier.issn1873-0353
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3306
dc.journal.titleJournal of International Economics
dc.language.isoen
dc.publisherElsevier
dc.relation.departmentFinance
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subject.keywordBanking crises
dc.subject.keywordChina
dc.subject.keywordFinancial frictions
dc.subject.keywordLender of last resort
dc.titleA Quantitative Model of International Lending of Last Resort
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/acceptedVersion
dc.volume.number123
dspace.entity.typePublication
relation.isAuthorOfPublication627e06b8-d61f-4611-96fe-15cf32670e9f
relation.isAuthorOfPublication.latestForDiscovery627e06b8-d61f-4611-96fe-15cf32670e9f
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