Économies emergentes: l'incompatibilité entre changes flexibles et dettes en devises

Damien Besancenot and Radu Vranceanu

Revue d'économie politique, 2006, vol. 116, issue 4, 555-574

Abstract: At the end of the nineties, many developing countries featured an open capital market and relied heavily on dollar-debt financing of their private sector. This paper analyses whether, in this context, adopting a clean floating exchange rate regime can be a sustainable policy choice. In the model, successive generations of investors must decide whether they hold or not the debt of a representative firm from the non-tradable sector. The exchange rate is subject to random shocks, which makes uncertain the firm?s solvency. We show that a small risk of insolvency would bring about a much larger risk of illiquidity.

Keywords: floating exchange rate; dollar debt; rational expectations; financial crises (search for similar items in EconPapers)
Date: 2006
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