The balance of payments and borrowing constraints: an alternative view of the Mexican crisis

Andrew Atkeson and José-Víctor Ríos-Rull
Authors registered in the RePEc Author Service: José-Víctor Ríos-Rull

No 212, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: In this paper we develop a model in which a country faces a balance of payments crisis if constraints on its international borrowing bind. We use the model to describe the dynamics of the trade balance, capital account, and balance of payments of a country that borrows to finance consumption following sweeping macroeconomic and structural reforms and then hits constraints on its international borrowing. We compare the predictions of this theoretical example with events in Mexico from 1987 through 1995.

Keywords: Mexico; Financial crises - Mexico; Balance of payments (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: The balance of payments and borrowing constraints: An alternative view of the Mexican crisis (1996)
Working Paper: The Balance of Payments and Borrowing Constraints: An Alternative View of the Mexican Crisis (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:212

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