EconPapers    
Economics at your fingertips  
 

Runs versus Lemons: Information Disclosure and Fiscal Capacity

Thomas Philippon (), Joseba Martinez and Miguel de Faria e Castro
Additional contact information
Joseba Martinez: New York University
Miguel de Faria e Castro: NYU

Authors registered in the RePEc Author Service: Miguel Faria-e-Castro

No 1146, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: We argue that, during financial crises, governments are forced to choose between runs and lemons. Revealing information about assets' quality can improve welfare by reducing adverse selection, but it can also create runs on weak banks. A credible fiscal backstop mitigates these risks and allows the government to pursue efficient but risky strategies of high disclosure. Our theory sheds light on optimal interventions and provides an explanation for the different choices that governments make during financial crises.

New Economics Papers: this item is included in nep-cba
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://economicdynamics.org/meetpapers/2015/paper_1146.pdf (application/pdf)

Related works:
Journal Article: Runs versus Lemons: Information Disclosure and Fiscal Capacity (2017) Downloads
Working Paper: Runs versus Lemons: Information Disclosure and Fiscal Capacity (2016) Downloads
Working Paper: Runs versus Lemons: Information Disclosure and Fiscal Capacity (2015) Downloads
Working Paper: Runs versus Lemons: Information Disclosure and Fiscal Capacity (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:1146

Access Statistics for this paper

More papers in 2015 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Series data maintained by Christian Zimmermann ().

 
Page updated 2017-11-29
Handle: RePEc:red:sed015:1146