Solvency runs, sunspot runs, and international bailouts [microform] / Mark M. Spiegel.
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| Format: | Microfilm Book |
| Language: | English |
| Published: |
[San Francisco, Calif.] :
Federal Reserve Bank of San Francisco,
[2001]
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| Series: | FRBSF working paper ;
#2001-05. ASI microfiche library. Non-depository collection ; ASI 2001 9393-10.138. |
| Subjects: |
| Abstract: | "This paper introduces a model of international lender of last resort (ILLR) activity under asymmetric information. The ILLR is unable to distinguish between runs due to debtor insolvency and those which are the result of pure sunspots. Nevertheless, the ILLR can elicit the underlying state of nature from informed creditors by offering terms consistent with generating a separating equilibrium. Achieving the separating equilibrium requires that the ILLR lends to the debtor at sufficiently high rates. This adverse selection problem provides an alternative rationale for Bagehot's principle of last-resort lending at high rates of interest to the moral hazard motivation commonly found in the literature."--FRB of San Francisco web site. |
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| Item Description: | "March 21, 2000 [i.e. 2001]." |
| Physical Description: | 31 pages ; 28 cm. Also available via the Internet at the FRB of San Francisco web site: http://www.frbsf.org/ |
| Bibliography: | Includes bibliographical references (pages 28-29) |
| Reproduction Note: | Microfiche. |
| Additional Physical Form available Note: | Also available via the Internet at the FRB of San Francisco web site: http://www.frbsf.org/ |
| Citation/References Note: | Lexis/Nexis statistical; American statistical index. Abstracts. |