TY  - BOOK
AU  - Clark,Peter B.
AU  - Huang,Haizhou
TI  - International Financial Contagion and the IMF: A Theoretical Framework 
T2  - IMF Working Papers; Working Paper
SN  - 1451855915 :
SN  - 1018-5941
PY  - 2001///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Capital Market
KW  - imf
KW  - Contagion
KW  - Financial Contagion
KW  - Financial Markets and the Macroeconomy
KW  - International Capital
KW  - International Financial Contagion
KW  - Argentina
KW  - Australia
KW  - Brazil
KW  - United States
N2  - We provide a model of contagion where countries borrow or lend for consumption smoothing at the market interest rate or a lower IMF rate. Highly indebted countries hit by large negative shocks to output will default. The resulting reduction in loanable funds raises interest rates, increases the vulnerability of other indebted countries, and can generate further rounds of defaults. In this environment the IMF can limit default and internalize the externality generated by contagion through its lending with conditionality. We characterize the IMF's optimal lending decision in mitigating the loss in world consumption
UR  - http://elibrary.imf.org/view/IMF001/03693-9781451855913/03693-9781451855913/03693-9781451855913.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451855913
ER  -