Search Results
Journal Article
Emerging Bond Markets and COVID-19: Evidence from Mexico
The pandemic caused by the coronavirus is depressing economic activity and severely straining government budgets globally. Without international support, the ability of emerging economies to weather this crisis will depend crucially on access to and the cost of borrowing in domestic government bond markets. Analyzing bond flows and risk premiums for Mexican government bonds during the pandemic gives some insights into a major emerging economy’s experience. Mexican risk premiums have increased more than 1 percentage point above predicted levels, pointing to tighter funding conditions for the ...
Journal Article
A chronology of the Mexican financial crisis
Working Paper
Financial crises and total factor productivity
Total factor productivity (TFP) falls markedly during financial crises, as we document with recent evidence from Mexico and Asia. These falls are unusual in magnitude and present a difficult challenge for the standard small open economy neoclassical model. We show in the case of Mexicos 1994-95 crisis that the model predicts that inputs and output should have fallen much more than they did. Using models with endogenous factor utilization, we find that capital utilization and labor hoarding can account for a large fraction of the TFP fall during the crisis. However, these models also predict ...
Journal Article
Mexico's financial crisis affected other Latin countries
Journal Article
How do currency crises spread?
Journal Article
The Mexican economic crisis: alternative views
The authors of this article suggest that many of the explanations for the 1994 crisis are based on questionable assumptions and dubious analysis. They contend that, when trying to explain the crisis, most authors have concentrated on the wrong economic "fundamentals." They challenge the conventional view that the crisis was caused by a combination of flawed fiscal, monetary, and exchange rate policies. Their explanation for the crisis belongs in an alternative camp that emphasizes the vulnerability of the Mexican financial system to swings in expectations and investor confidence. ; In their ...
Working Paper
Did the debt crisis or the oil price decline cause Mexico's investment collapse?
This paper proposes a simple investment model that permits a test of the relative importance of Mexico's terms of trade decline, the reversal in net capital inflows, and the debt overhang, in explaining Mexico's investment decline in the early 1980's. The paper uses previously unexploited sectoral investment data between 1981 and 1985 to estimate the quantitative importance of these explanations. The data indicate that the main microeconomic mechanism driving the investment decline was the rise in the relative price of investment goods and further that the deterioration in Mexico's ...
Conference Paper
Foreign lending, disclosure and the Mexican debt crisis
Working Paper
Crisis, contagion, and country funds: effects on East Asia and Latin America
Spillovers effects, from one country or region to other countries and regions, have attracted renewed attention in the aftermath of the Mexican crisis of December 1994. This paper uses data on closed-end country funds to study how a negative shock in Mexican equities is transmitted to Asia and Latin America, and to particular countries within each region. Country funds allow us to study the transmission to other fund net asset values (NAVs) and prices, which are traded in local stock markets in New York, respectively. The evidence indicates that shocks such as the Mexican crisis produce ...
Journal Article
Do international financial crises defy diagnosis?