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dc.creatorParra-Polanía, Julián Andrés
dc.creatorVargas-Riaño, Carmiña Ofelia
dc.description.abstractIn an open-economy model with collateral constraint, Schmitt-Grohé and Uribe (2016) propose a procyclical policy (it calls for capital controls that are higher during crises than during normal times) that supposedly solves the externality problem that results from the underestimation of the social costs of decentralized debt decisions. We show that such policy does not solve the problem and recall that previous literature has established that a countercyclical tax on debt (positive during normal times and nil during crisis) does. We also show that the externality problem can be solved as well by a countercyclical subsidy on consumption (positive during crises and zero in normal times). The latter result, however, is not a robust policy recommendation because it is not a solution if we remove the assumption that lenders overlook the effect of lump-sum taxes on borrowing capacity.
dc.format.extent10 páginas
dc.publisherBanco de la República de Colombia
dc.relation.ispartofDocumentos de trabajo
dc.relation.ispartofseriesBorradores de Economía
dc.relation.isversionofBorradores de Economía; No. 989
dc.rights.accessRightsOpen Access
dc.subjectRestricción de crédito
dc.subjectCrisis financiera
dc.subjectControles de capital
dc.titleOptimal crisis interventions in an open economy with credit constraint
dc.typeWorking Paper
dc.subject.jelF34 - International Lending and Debt Problems
dc.subject.jelF41 - Open Economy Macroeconomics
dc.subject.jelG01 - Financial Crises
dc.subject.jelH23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
dc.subject.jelD62 - Externalities
dc.subject.keywordCredit constraint
dc.subject.keywordFinancial crisis
dc.subject.keywordCapital controls
dc.subject.lembPolítica fiscal
dc.subject.lembModelos económicos
dc.subject.lembPolítica social
dc.type.spaDocumentos de trabajo
dc.rights.spaAcceso abierto
dc.rights.ccAtribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0
dc.subject.jelspaD62 - Externalidades
dc.subject.jelspaF34 - Préstamos internacionales y problemas relacionados con la deuda externa
dc.subject.jelspaF41 - Macroeconomía de la economía abierta
dc.subject.jelspaG01 - Crisis financiera
dc.subject.jelspaH23 - Externalidades; Efectos redistributivos; Impuestos y subvenciones medioambientales
dc.type.hasversionPublished Version
dc.source.bibliographicCitationBenigno, G., Chen, H., Otrok, C., Rebucci, A., Young, E. (2016). "Optimal Capital Controls and Real Exchange Rate Policies: A Pecuniary Externality Perspective," Journal of Monetary Economics, vol. 84(C), pp. 147-165.
dc.source.bibliographicCitationBianchi, J. (2011). Overborrowing and Systemic Externalities in the Business Cy-cle, American Economic Review, vol. 101(7), American Economic Association, pp. 3400-3426.
dc.source.bibliographicCitationJeanne, O., Korinek, A. (2010). "Excessive Volatility in Capital Flows: A Pigouvian Taxation Approach," American Economic Review, American Economic Association, vol. 100(2), pp. 403-407.
dc.rights.disclaimerLas opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.
dc.creator.firmaJulian A. Parra-Polania
dc.creator.firmaCarmiña O. Vargas

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