scholarly journals External Shocks, Politics and Private Investment: Some Theory and Empirical Evidence

10.3386/w3960 ◽  
1992 ◽  
Author(s):  
Sule Ozler ◽  
Dani Rodrik
Keyword(s):  
Empirical Evidence ◽  
Private Investment ◽  
External Shocks

Default Risk and the Effects of Fiscal Policy on Interest Rates: 1929–1945

1988 ◽  
Vol 16 (3) ◽  
pp. 357-373
Author(s):  
David Bowles ◽  
Holley Ulbrich ◽  
Myles Wallace
Keyword(s):  
Fiscal Policy ◽  
Interest Rates ◽  
Empirical Evidence ◽  
Risk Premium ◽  
Default Risk ◽  
Corporate Bonds ◽  
Private Investment ◽  
Crowding Out ◽  
Government Bonds ◽  
Macroeconomic Models

Conventional macroeconomic models suggest that expansionary fiscal policy causes higher interest rates, resulting in crowding out of private investment. In this article, we argue that such models ignore the default risk differential between the interest rates on government bonds and corporate bonds. If expansionary fiscal policy causes an expansion in real GNP, default risk falls on corporate bonds. Our model suggests that if the default risk premium falls, (1) corporate interest rates may fall relative to rates on government bonds and (2) private investment is crowded in. We find some supporting empirical evidence of this effect for the period 1929–1945.

scholarly journals St. Lucia

2020 ◽  
Vol 20 (54) ◽  
Author(s):  
Keyword(s):  
Public Debt ◽  
Financial System ◽  
Private Investment ◽  
Infrastructure Investment ◽  
External Shocks ◽  
Growth Prospects ◽  
Near Term

St. Lucia’s near-term growth prospects are favorable, supported by large infrastructure investment and robust tourist inflows. However, longer-term growth continues to be impeded by high public debt, lingering vulnerabilities in the financial system, and structural impediments to private investment. Diminishing policy buffers further weaken the country’s resilience to external shocks against the backdrop of a precarious global outlook.

scholarly journals Similarities of External Shocks responses of Armenia and Russia: SVAR Approach

2018 ◽  
Vol 8 (1) ◽  
pp. 198
Author(s):  
Robert Tumanyan
Keyword(s):  
Empirical Evidence ◽  
Monetary Union ◽  
Optimum Currency Area ◽  
External Shocks ◽  
Currency Area ◽  
Correlation Analyses ◽  
Structural Differences ◽  
Optimum Currency

The feasibility of EUAE countries to form a Monetary Union is analyzed. The paper uses SVAR methodology to examine impact of External Shocks to specific case of Armenia and Russia alongside with correlation analyses of responses. In this framework, empirical evidence allows to affirm that Armenia and Russia do not meet a criteria of Optimum currency area “similarities in external shock’s responses,” the results underline structural differences of economies and asymmetry in external shock’s responses, therefore EUEA countries are not ready for Monetary union, and deeper integration is needed. 

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