Moral Hazard, Political Economy, Behavioural Approaches in International Finance
Background
The proposed research is divided into three areas: First we investigate the sovereign debt crisis as a result of bargaining between creditors and debtors when moral hazard interacts with debtor coordination. Here we look at how a particular international financial architecture (such as CACs) and international institutions (such as IMF) can affect the crisis. Second, we plan to investigate how particular political institutions (parliamentary vs presidential) affect the incentives of the sovereign borrowers. We look at specific policy to improve the stability and predictability of credit markets. Third, we incorporate recent advances in behavioural economics to exchange rate determination to provide an alternative micro foundation for excess volatility. We attempt to identify appropriate policy to curb short run volatility.
Working Papers :
WEF0049
Emerging Floaters: Pass-Throughs and (Some) New Commodity Currencies
Emanuel Kohlscheen
March 2009
WEF0014
Capital Flows, Interest Rates and Precautionary Behaviour: a Model of "Global Imbalances"
Marcus Miller, Lei Zhang
July 2006
WEF0004
A Sovereign Debt Model with Trade Credit and Reserves
Emanuel Kohlscheen & Stephen A O'Connell
March 2006
WEF0003
Why are there serial defaulters? Quasi-experimental evidence from Constitutions
Emanuel Kohlscheen
March 2006
Seminar papers:
Garcia-Fronti, J., and L. Zhang “Political Instability and the Peso Problem”,mimeo, University of Warwick
Researchers:
Dr Lei Zhang
Professor S Ghosal
Dr E Kohlscheen
University of Warwick
Contact:
Dr Lei Zhang
Department of Economics
University of Warwick
Coventry
CV4 7AL
Tel: 02476 522983
email: L.Zhang@warwick.ac.uk
Duration of Research:
March 2005 - February 2008