Briefing
Policies for Improving Sovereign Debt Restructurings
Patel, Kushal; Sapriza, Horacio (2023-02)
Recent sovereign default restructurings during the COVID-19 pandemic have reignited interest in research and policy suggestions for improving these restructuring episodes. Evidence for the effectiveness of these policies has largely come from empirical analysis of past episodes, but this type of analysis makes it difficult to explicitly evaluate the economic improvements from implementing these polices. We develop and calibrate a model that allows us to analyze the effects of the proposed policies.
Richmond Fed Economic Brief , Volume 23 , Issue 04

Briefing
How Important Are Asset Price Fluctuations for Business Investment?
Karabarbounis, Marios; Patel, Kushal (2023-02)
Previous recessions in the U.S. revealed to economists and policymakers that weak macroeconomic conditions may have been worsened by financial distress. Economists have theorized that this association is explained by a decline in physical asset prices that often precede recessions. When physical asset prices decline, firms pledge less-valuable assets to banks, which leads banks to reduce lending. Consequently, firms are not able to finance their investments, which reduces overall economic activity. In this article, we review more recent literature that may indicate that this mechanism is ...
Richmond Fed Economic Brief , Volume 23 , Issue 05