Martin Guzman

AN ANALYSIS OF ARGENTINA'S 2001 DEFAULT RESOLUTION

Argentina’s 2001 default was followed by a complex debt restructuring that included a long legal dispute with so-called “vulture funds�? and other holdout creditors. The full resolution of the sovereign default took almost 15 years. This paper examines the whole restructuring process. It describes the strategies followed by the debtor and the bondholders, the domestic economic implications of the restructuring and the characteristics of the legal disputes. It also analyzes the implications of the default resolution for the functioning of sovereign lending markets.

Real exchange rate policies for economic development

This paper analyzes the role of real exchange rate (RER) policies in promoting economic development. Markets provide a suboptimal amount of investment in sectors characterized by learning spillovers. We show that a stable and competitive RER policy may correct for this externality and other related market failures. The resulting development of these sectors leads to overall faster economic growth. A system of effectively multiple exchange rates is required when spillovers across different tradable sectors differ. The impact of RER policies is increased when they are complemented by traditional industrial policies that increase the elasticity of the aggregate supply to the RER. Among the instruments required to implement a stable and competitive RER are interventions in the foreign exchange market and regulation of capital flows. We also discuss the trade-offs associated with alternative stable and competitive RER policies.

A Theory of Pseudo-Wealth

Recent events in the US and Europe have witnessed the limitations of conventional macroeconomic models to predict and explain large economic recessions and crises, and to provide guidance for policies that attempt to resolve them.

Learning, Expectations, and the Financial Instability Hypothesis

This paper analyzes what assumptions on formation of expectations are consistent with Minsky’s Financial Instability Hypothesis (FIH) and its corollaries. The FIH establishes that financial relations evolve over time turning a stable system into an unstable one. Financial crises would be more likely to occur, and more severe if they occur, the longer the previous crisis recedes into the past. We show that the hypothesis is consistent with assumptions on formation of expectations that imply learning from realization of states and inconsistent with the assumption of full information rational expectations.

Contemporary issues in microeconomics

Table of Contents List of Figures List of Tables Foreword Notes on Contributors Introduction Part I: Inequality, Poverty, and Security 1. The UTIP Global Inequality Data Sets 1963-2008. Updates, Revisions and Quality Checks James K. Galbraith, Beatrice Halbach, Aleksandra Malinowska, Amin Shams and Wenjie Zhang 2. Multidimensional Poverty Measurement: The Mexican Wave Gonzalo Hernandez Licona 3. Inequality, Economic Growth and Natural Ressources Rent: Evidence From The Middle East and North Africa Hamid E. Ali and Sara M. Sami 4. Inequality Impacts of Oil Dependence in the Mena Sevil Acar 5. Housing and Saving in Retirement Across Countries Makoto Nakajima and Irina A. Telyukova Part II: Income Contingent and Student Loans 6. Income Contingent Loans Joseph E. Stiglitz 7. Income Contingent Loans as a General Risk Management Instrument Bruce Chapman 8. Utilising the Transactional Efficiencies of Contingent Loans - A General Framework for Policy Application Richard Denniss 9. Income Contingent Loans for Social Policy: the Case of Paid Parental Leave Timothy Higgins 10. Illustrating Trade-Off Between Interest Rates and Aggregate Loan Recovery of the Student Loans Fund in Thailand Kiatanantha Lounkaew 11. The Financial Capacity of German University Graduates to Repay Student Loans Mathias G. Sinning Index