API-120: Advanced Macroeconomics for the Open Economy, Fall 2009
Harvard Kennedy School
Course Syllabus: prospectus, outline/schedule and readings
Staff: Professor:
Faculty Assistant:
Teaching Fellow:
Course Assistants:
Times: Lectures:
Review Sessions:
Final exam:
Jeffrey Frankel Littauer 217
Greg Dorchak
Rubinstein 110C 617 496-8304
Clara Zverina
917 715-3081
Jasmina Beganovic, Kim Edwards and Daniella Llanos
Mondays and Wednesdays, 2:40-4:00 pm, Starr Auditorium
Fridays: 1:10PM- 2:30PM in L130 and 2:40-4:00 in Starr
Friday, December 11, 2009, 2-5 pm
Course Description: This course is the first in the two-course sequence on Macroeconomic Policy in the
MPA/ID program. It particularly emphasizes the international dimension. The general perspective is that of
developing countries and other small open economies, defined as those for whom the terms of trade are
determined on world markets and for whom foreign income, inflation and interest rates can also be taken as
given. The course could be titled “Money and Finance in Small Open Economies.” The focus is on monetary,
fiscal, and exchange rate policy, and on the determination of the current account balance, national income, and
inflation. Models of devaluation include those where the price of internationally traded goods in terms of nontraded goods is central. A major overall theme is the implications of increased integration of global financial
markets. Another is countries’ choice of monetary regime, especially the degree of exchange rate flexibility.
There will be some applications, for example, to recent financial crises.
Nature of the approach: The course is built around analytical models. Although real-world examples will
appear throughout, the course will rely very heavily on theoretical and econometric analysis, as is customary in
economics classes. This is not an appropriate course for students who want some basic exposure to openeconomy macroeconomics. It requires sustained immersion in relevant economic theory, and will not present a
primarily descriptive or historical approach. Having said that, the course usually leaves to the successor
course, API 119, the mathematical derivation of behavioral equations from first principles of individuals’
optimization of intertemporal utility.
Who is expected to take the course: This course, like Advance Macro for the Open Economy II (API 119), is
a required component of the MPA / International Development sequence. It is envisioned that a typical
student might one day be making policy decisions in a central bank or economics ministry or an international
financial institution, but first needs training at a high level of intellectual rigor. In addition to MPA/ID
students, a few other students are sometimes admitted by permission of instructor -- in particular, someone
who has taken ITF220 and done well in it, and who in addition is comfortable with calculus and the other
mathematical tools that distinguish the MPA/ID curriculum.
Required tools: Besides macroeconomics, some knowledge of basic microeconomics, international economics
and statistics is presumed. Analytical tools that will be used include especially calculus; also some differential
equations, probability, and multivariate regression analysis.
Grading : Problem sets 25% (seven of them), mid-term exam 25%; final exam 50%.
Problem Set
1
2
3
4
5
6
7
8
tentative due date
Wed., Sept. 9
Wed., Sept. 16
Wed., Sept. 23
Wed., Sept.30
Wed., Oct. 28
Wed., Nov. 9
Wed., Nov. 18
Mon., Nov. 30
For each problem set, each student must decide whether to work in a group or to do it on his or her own.
Those who do it on their own (1) must not discuss any aspect of the problem set with any other student, (2)
need to indicate below their name when they hand in the problem set that they did it on their own, and (3)
will then receive a small bonus on the grade (one point). To indicate that you did it on your own despite
having discussed something with another student would be a violation of academic integrity.
(For Academic Code, see http://www.ksg.harvard.edu/registrar/acad_code.htm. )
Please check the dates of the midterm and final exams. If you cannot take the exams, do not take
the course.
Complete readings:
In short: Most of the course will be based on articles. (See reading list.)
For lectures 5-7, the text will be Chapter 10, “Inflation and Monetary Policy,” of David Romer’s
Advanced Macroeconomics, (McGraw Hill: New York, 3rd edition, 2006). This is just one
chapter, but Romer is the text for Macro II, so most students will have to buy it anyway.
Textbooks for further background: Most of the students will have already studied
basic and intermediate macroeconomics. The necessary pre-requisite background in
macroeconomics at a basic level is represented by Greg Mankiw, Macroeconomics, 5th edition,
Worth: NY, 2003.
Students will probably want to acquire World Trade and Payments, R.Caves, J.Frankel,
and R.Jones (10th edition, Addison-Wesley Longman, 2007), especially those who have not
previously taken a serious course in international economics. It is abbreviated WTP on the
syllabus and will be referred to often in the course. At a considerably more advanced level, the
recommended text is Maurice Obstfeld and Kenneth Rogoff, Foundations of International
Economics (MIT Press, 1996).
Readings: The complete reading list is below and posted on the course website under
“online materials.” The required readings in this course (indicated with asterisks) will be
available either online or in a reader from the Course Materials Office. Some other, less
essential, articles pertaining to each topic will be on reserve in the library. Please see the online
reading list for full details about availability of readings and links to online readings.
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Topics and schedule:
Tentative
due dates:
I. DEVALUATION AND THE TRADE BALANCE
1. (9/2) Derivation of Marshall-Lerner condition; J-curve
II. THE MUNDELL-FLEMING MODEL
2. (9/9) Keynesian trade balance; TB empirically; Intro to Mundell-Fleming
3. (9/14) Monetary and fiscal policy with a fixed exchange rate; Reserve flows
4. (9/16) The model with a floating rate, perfect capital mobility; Impossible Trinity
III. MONEY AND INFLATION
5. (9/21) Aggregate Supply, money growth and inflation
6. (9/23) Monetary policy: Dynamic inconsistency and rules
7. (9/28) Seignorage and hyperinflation
___ PS 1 due
___
PS 2 due
___
PS 3 due
IV. PURCHASING POWER PARITY
8. (9/30) Does PPP hold empirically? PPP deviation patterns. How long do they last? ___ PS 4 due
9. (10/5) Why does PPP fail? Sticky prices; Tariffs & transp. costs; Nontraded goods
V. SMALL OPEN ECONOMIES
10. (10/7) Devaluation in small countries
[10/12 Columbus Day holiday]
11. (10/14)
12. (10/19) The Salter-Swan ("Nontraded Goods") Model
13. (10/21) Dutch Disease; Contractionary effects of devaluation
MIDTERM EXAM
VI. EXCHANGE RATE REGIMES
14. (10/26) Classification; Pros and Cons of Fixed vs. Floating Rates
15. (10/28) Optimum Currency Areas; Intermediate regimes
___ PS 5 due
VII INTEGRATION OF FINANCIAL MARKETS
16. (11/2) The theory of gains from intertemporal trade; Capital mobility measures
17. (11/4) Interest Rate Parity (covered, uncovered, real); currency premia
VIII. MODELS OF EXCHANGE RATE DETERMINATION
18. (11/9) Flexible-price models; Bubbles
___ PS 6 due
[ 11/11 Veterans Day holiday]
19. (11/16) Sticky-price models and overshooting
IX. CRISES IN EMERGING MARKETS
20. (11/18) Speculative attack models; political economy failures of fiscal policy
21. (11/23) Boom-bust cycle; Warning indicators; Sudden Stops; Contagion; IMF
___ PS 7 due
X. FORWARD MARKET BIAS, RISK, AND PORTFOLIO DIVERSIFICATION
22. (11/25) Exchange rate forecasting & tests of bias in the forward rate (“carry trade”)
[ 11/26-11/29 Thanksgiving Vacation ]
23. (11/30) Optimal portfolio diversification
24. (12/2) Home bias; Country risk
Friday, Dec. 11, 2:00-5:00 pm
___ PS 8 due
FINAL EXAM
3
Fall 2009
API-120: Macroeconomic Policy Analysis I
Prof. Jeffrey A. Frankel
Harvard Kennedy School
READING ASSIGNMENTS
* = required reading, available in reader or online, when possible
** = required most strongly, available in reader or online, when possible
[ ] = background readings
N.Greg Mankiw, 2006, “The Macroeconomist as Scientist and Engineer,” J. Ec. Perspectives 20, no.4, Fall, 29-46.
1. DEVALUATION AND THE TRADE BALANCE
WTP, 2007, Chapters 15-16 and Supplement pp. S43-S44.
**
DERIVATION OF MARSHALL-LERNER CONDITION
J-CURVE AND EMPIRICAL ESTIMATES
Jaime Marquez, “Income and Price Effects of Asian Trade,” in his Estimating Trade Elasticities (Kluwer Academic
Publishers, Boston, 2002) p. 91-102. **
2. MONETARY & FISCAL POLICY UNDER INTERNATIONAL CAPITAL MOBILITY
MUNDELL-FLEMING MODEL UNDER FIXED RATES; FLOATING; & PERFECT CAPITAL MOBILITY
Caves, Frankel and Jones WTP, 2001, Chapters 19.1, 22 and 23. **
[For background, WTP Chapters 17.1-17.3 & 18. Also Romer, Chapter 5.1-5.2 or Blanchard-Fischer, 10.4]
Robert Mundell, "Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange Rates,"
Canadian J.Ec. and Poli.Sci., Nov. 1963. Adapted in his International Economics, 18, pp. 250-262.
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3. MONEY AND INFLATION
[Background on Aggregate Supply: WTP, Chapter 26.1-26.3; or Chapter 5.3-5.5 of David Romer’s Advanced
Macroeconomics (McGraw Hill: New York, 3rd edition, 2006.]
“Inflation in Emerging Economies: An Old Enemy Rears Its Head,” The Economist, May 24, 2008, p.91-93. *
V. V. Chari & Patrick Kehoe, 2006, "Modern Macroeconomics in Practice: How Theory Is Shaping Policy," Journal of
Economic Perspectives, vol. 20(4), pages 3-28, Fall.
Paul Krugman, “How Did Economists Get It So Wrong,” New York Times Magazine, September 6, 2009, pp36-43.
INFLATION, MONEY GROWTH AND INTEREST RATES
Romer’s Advanced Macroeconomics, Chapter 10.1 in 3rd ed. **
THE DYNAMIC INCONSISTENCY OF LOW-INFLATION MONETARY POLICY; RULES
Romer’s Advanced Macroeconomics Chapters 10.3-10.6 in 3rd ed..
**
Kenneth Rogoff, "The Optimal Degree of Commitment to an Intermediate Monetary Target." Quarterly Journal
of Economics 100, November, 1985: 1169-1189. *
Kenneth Rogoff, 2003, “Globalization and Disinflation,” Economic Review, Federal Reserve Bank of Kansas
City, 88, no. 4, 4th quarter, pp. 45-78. *
SEIGNORAGE, INFLATION, AND HYPERINFLATION; COSTS OF HIGH INFLATION
WTP, Ch. 19.3, p.582.
*
Romer’s Advanced Macroeconomics, Chapter 10.8
**
Philip Cagan, 1956, “The Monetary Dynamics of Hyperinflation,” in Milton Friedman, ed., Studies in the
Quantity Theory of Money (University of Chicago Press, Chicago), 25-117.
Rudiger Dornbusch and Stanley Fischer, 1993, “Moderate Inflation,” World Bank Econ.Rev., 7, no. 1, 1-44. *
“Caps on Prices Only Deepen Zimbabweans’ Misery,” M.Wines, New York Times, Aug. 2, 2007, p.A1-8 *
4. PURCHASING POWER PARITY
Caves, Frankel and Jones, WTP, 2001, Chapter 19.2.
**
Kenneth Rogoff, “The Purchasing Power Parity Puzzle, J. Economic Literature, 34: (2) June 1996, 647-68. **
Alan Taylor and Mark Taylor, 2004, “The Purchasing Power Parity Debate,” Journal of Economic Perspectives, 18(4), pages
135-158, Fall. NBER WP. 10607.
*
"McCurrencies: Where’s the Beef? How Seriously Should You Take the Big Mac Index?" Economist, Apr.27, 1996. *
David Parsley and Shang-Jin Wei, “A Prism into the PPP Puzzles: The Micro-Foundations of Big Mac Real
Exchange Rates,” NBER Working Paper No. 10074, Nov. 2003.
DOES THE REAL EXCHANGE RATE RANDOM-WALK, OR REGRESS TO PPP? TESTS ON BIG SAMPLES
Jeffrey Frankel, "Zen and the Art of Modern Macroeconomics," reprinted in On Exchange Rates, J.Frankel, MIT
Press, 1993, pp.173-181 & p.380-81.
*
SLOW PASS-THROUGH TO IMPORT PRICES, AND PRICING TO MARKET
Rudiger Dornbusch, "Exchange Rates and Prices," American Economic Review, 77, 1, March 1987, 93-106.
5
DOES REAL EXCHANGE RATE VARIABILITY ARISE FROM FLEXIBLE RATES & STICKY PRICES?
Michael Mussa, "Nominal Exchange Rate Regimes and the Behavior of Real Exchange Rates: Evidence and
Implications," K. Brunner & A. Meltzer, eds., Carnegie Rochester Series on Pub.Pol., 25, 1986, 117-214.
TESTS OF ARBITRAGE ACROSS BORDERS
Charles Engel and John Rogers, 1994, "How Wide is the Border?" AER 86, no.5, Dec. 1996, 1112-25.
*
Andrew Rose, “One Money, One Market: Estimating the Effect of Common Currencies on Trade,” Economic
Policy, 2000.
*
Kevin O’Rourke and Jeffrey Williamson, 1999, “Transport Revolutions and Commodity Market Integration,”
Ch. 3, Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy, MIT Press.
NON-TRADED GOODS
Bella Balassa, "The Purchasing Power Parity Doctrine: A Reappraisal," J. Political Economy, 72, 1964, 584-596.
Irving Kravis and Richard Lipsey, "National Price Levels and the Prices of Tradables and Nontradables,"
American Economic Review, 78, 2, May 1988, 474-78.
Jose De Gregorio, Alberto Giovannini, and Holger Wolf, 1994, "International Evidence on Tradables and
Nontradables Inflation," NBER WP no. 4438; European Economic Review, 38, no.6, June 1994, 1225-44.
5. SMALL OPEN ECONOMIES
Caves, Frankel and Jones, World Trade and Payments , Ch.19.4, Appendix 19.C, and Chapter 20. **
DEVALUATION IN SMALL COUNTRIES
Rudiger Dornbusch, "Devaluation, Money and Nontraded Goods," American Economic Review, Dec. 1973,
871-880. *
THE SALTER-SWAN ("NONTRADED GOODS") MODEL
Max Corden “A Model of Balance of Payments Policy,” Chapter 2 in Economic Policy, Exchange Rates and
the International Monetary System (Oxford University Press), 1994.
W.E.G. Salter, “Internal and External Balance – The Role of Price and Expenditure Effects,” Economic
Record, August 1959.
Trevor Swan, "Longer Run Problems of the Balance of Payments," in H.W. Arndt and W.M. Corden, eds, The
Australian Economy (Cheshire, Melbourne), 1963.
DUTCH DISEASE
Jeffrey Sachs, “How to Handle the Macroeconomics of Oil Wealth,” Ch. 7 in Escaping the Resource Currse,
edited by M.Humphreys, J.Sachs and J.Stiglitz (Columbia University Press: NY) 2007, pp.173-193. **
CONTRACTIONARY EFFECTS: INDEXATION, REAL WAGE RIGIDITY, BALANCE SHEET EFFECT
Sebastian Edwards, “Are Devaluations Contractionary?” Rev. of Econ. and Stats. 68, 3, Aug. 1986, 501-508.
Paul Krugman, “Balance Sheets, the Transfer Problem and Financial Crises,” International Finance and
Financial Crises, edited by P.Isard, A.Razin and A.Rose (Kluwer Academic Publishers), 1999.
Jeffrey Frankel “Contractionary Currency Crashes in Developing Countries,” IMF Staff Papers 52, no. 2,
2005, 149-192.
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6. EXCHANGE RATE REGIMES
Jeffrey Frankel, “Experience of and Lessons from Exchange Rate Regimes in Emerging Economies,” Monetary and
Financial Integration in East Asia, Asian Development Bank (Palgrave Macmillan) 2004, vol.2, 91-138. **
WTP, 2003, Section 26.4-26.5.
FIXED VS. FLOATING RATES
Milton Friedman, “The Case for Flexible Exchange Rates.” In M. Friedman, ed., Essays in Positive
Economics. Chicago, University of Chicago Press: 1953, 157-203.
OPTIMUM CURRENCY AREAS
Robert Mundell, "A Theory of Optimum Currency Areas," American Economic Rev., Sept. 1961, 657-665. *
THE EXCHANGE RATE AS A NOMINAL ANCHOR
Guillermo Calvo and Carlos Vegh, "Inflation Stabilization and Nominal Anchors," Contemporary Economic
Policy, Vol. XII (April 1994), pp. 35-45.
CURRENCY BOARDS AND DOLLARIZATION
Atish Ghosh, Anne-Marie Gulde and Holger Wolf, “Currency Boards -- More Than a Quick Fix?” Economic
Policy, 31, October 2000, 270-335.
INTERMEDIATE REGIMES: BANDS, BASKETS, CRAWLS, AND ADJUSTABLE PEGS
Kenneth Rogoff and Maurice Obstfeld, "The Mirage of Fixed Exchange Rates," Journal of Economic
Perspectives 9, Fall 1995, 73-96.
Paul Krugman, "Target Zones and Exchange Rate Dynamics," Quarterly J. Economics, 106, 3: 1991, 669-82.
John Williamson, “The Case for a Basket, Band and Crawl (BBC) Regime for East Asia,” in D.Gruen & J.
Simon, eds., Future Directions for Monetary Policies in East Asia, Res. Bank of Australia, 2001, 97-109.
7. INTEGRATION OF FINANCIAL MARKETS
“Policing the frontiers of finance – Is foreign capital a luxury that poor countries can live without?” [summary of
Rodrik & Subramanian], The Economist, Apr. 12, 2008, p.87 **
“Economics Focus: Capital Bonanzas,” [summary of Reinhart & Reinhart] The Economist, Sept. 27, 2008, p. 92. **
M Ayhan Kose, Eswar Prasad, Kenneth Rogoff, and Shang-Jin Wei, 2009. "Financial Globalization: A
Reappraisal," IMF Staff Papers, vol. 56(1), pages 8-62, April. *
THE THEORY OF GAINS FROM INTERTEMPORAL TRADE
World Trade and Payments, 2007, Section 21.5.
**
Maurice Obstfeld and Kenneth Rogoff, Foundations of International Macroeconomics, Parts 1-4.
E.Prasad, R.Rajan, and A.Subramanaian, “The Paradox of Capital,” Finance and Development, IMF, March
2007, 44, no. 1.
*
Laura Alfaro, Sebnem Kalemli-Ozcan and Vadym Volosovych, 2005, “Why Doesn’t Capital Flow from Rich to
Poor Countries? An Empirical Investigation,” NBER WP No. 11901, Dec.
MEASURES OF CAPITAL MOBILITY, INCL. IRP CONDITIONS AND SAVING- INVESTMENT CORRELATIONS
Martin Feldstein and Charles Horioka, 1980, “Domestic Saving and International Capital Flows,” Economic
Journal 90: 314-29.
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8. MODELS OF EXCHANGE RATE DETERMINATION
WTP, 2007, Ch. 27.
especially Supplement S51-S55
**
Mark Taylor, "The Economics of Exchange Rates," Journal of Economic Literature, March 1995, 33, 1. *
Jeffrey Frankel and Andrew Rose, "A Survey of Empirical Research on Nominal Exchange Rates," Handbook of
International Economics, G. Grossman and K. Rogoff, eds., North-Holland, Amsterdam, 1995.
FLEXIBLE-PRICE MODELS
Michael Mussa, "The Exchange Rate, the Balance of Payments, and Monetary and Fiscal Policy under a
Regime of Controlled Floating, Scandinavian Journal of Economics 78, May 1976, 229-248.
STICKY-PRICE MODELS AND OVERSHOOTING
Rudiger Dornbusch, "Expectations and Exchange Rate Dynamics" J. Political Economy 84, 1976, 1161-76. **
Kenneth Rogoff, "Dornbusch's Overshooting Model After 25 Years." The Mundell-Felming Lecture, IMF Staff
Papers, vol 49, 2002. *
FORECASTING
Richard Meese and Ken Rogoff, "Empirical Exchange Rate Models of the Seventies: Do They Fit Out of
Sample?" Journal of International Economics, 14, 1983, pp. 3-24.
9. EMERGING MARKETS
WTP, 2007, Ch. 24.
“A stimulating question: Can emerging economies now afford counter-cyclical policies?” The Economist, Dec. 13,
2008, p.90. At http://www.economist.com/finance/PrinterFriendly.cfm?story_id=12775548 **
THE OPENING OF EMERGING MARKETS; DETERMINANTS OF INFLOWS; COUNTRY RESPONSES
Guillermo Calvo, Leo Leiderman and Carmen Reinhart, “Inflows of Capital to Developing Countries in the
1990s," Journal of Economic Perspectives, 10, no. 2, Spring 1996, 123-139. **
Sebastian Edwards, “Capital Controls Are Not the Reason for Chile’s Success,” Wall St. Journal, 4/3/98.
“Economics Focus: The uncomfortable rise of the rupee,” The Economist, Dec. 15, 2007, p. 86. **
“Capital inflows to China: Hot and bothered,” The Economist, June 28, 2008, p.79.
**
Maurice Obstfeld & Jay Shambaugh & Alan Taylor, 2009. "Financial Instability, Reserves, and Central Bank
Swap Lines in the Panic of 2008," American Economic Review, vol. 99(2), pages 480-86, May. **
INTRO TO SPECULATIVE ATTACK MODELS: 1ST, 2ND AND 3RD GENERATION
Roberto Chang and Andres Velasco, “Liquidity Crises in Emerging Markets: Theory and Policy,” in NBER
Macroeconomics Annual (MIT Press, Cambridge, 2000).
PROCYCLICAL FISCAL POLICY, POLITICAL BUDGET CYCLES & THE NATURAL RESOURCE CURSE
Adi Brender and Alan Drazen, “Political Budget Cycles in New Versus Established Democracies,” J. Monetary
Economics, 2005. NBER WP No.10539.
“Chile’s Economy: Cashing in the fruits of rigor,” The Economist, Feb. 21, 2009. **
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CONTAGION
Graciela Kaminsky, Carmen Reinhart and Carols Vegh, 2003, "The Unholy Trinity of Financial Contagion,"
Journal of Economic Perspectives, 17, no. 4, Fall, 99-118. *
Barry Eichengreen, Andy Rose and Charles Wyplosz, "Contagious Currency Crises." Scandinavian Journal of
Economics 98, no. 4, 1996, 463-484.
{Sergio Schmukler’s website on contagion: http://www1.worldbank.org/economicpolicy/managing%20volatility/contagion/index.html }
THE CRISES OF JULY 1997-DECEMBER 2001
Steven Radelet and Jeffrey Sachs "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects,"
Brookings Papers on Economic Activity, 1:1998. 1-74 & 88-90.
All the readings one could want on emerging markets, and many other current global macro issues, are on the website of
Nouriel Roubini; but now one must subscribe: http://www.rgemonitor.com.
10. FORWARD MARKET BIAS, RISK, AND PORTFOLIO DIVERSIFICATION
WTP, Chapter 28. **
Karen Lewis, “Puzzles in International Financial Markets,” in Handbook of International Economics, vol. 3,
G. Grossman and K. Rogoff, eds., North Holland, 1995. *
TESTS OF RATIONAL EXPECTATIONS IN THE FORWARD EXCHANGE MARKET
Kenneth Froot and Richard Thaler, “Anomalies: Foreign Exchange,” Journal of Economic Perspectives 4, no.
3, (Summer 1990), pp. 179-92.
Menzie Chinn, “The (Partial) Rehabilitation of Interest Rate Parity in the Floating Rate Era: Longer Horizons,
Alternative Expectations, and Emerging Markets,” J. International Money and Finance 25, 2006, 7-21. *
Jeffrey Frankel and Jumana Poonawala “The Forward Market in Emerging Currencies: Less Biased than in
Major Currencies,” forthcoming, J.Interntnl. Money & Finance. NBER WP 12496. HKS RWP09023, 2009.
CURRENCY RISK AND OPTIMAL PORTFOLIO DIVERSIFICATION
WTP, 10th ed., pp. S55-S58.
**
Charles Engel, “The Forward Discount Anomaly and the Risk Premium: A Survey of Recent Evidence,”
Journal of Empirical Finance, June 1996, pp. 123-191.
Jeffrey Frankel, "In Search of the Exchange Risk Premium: A Six-Currency Test Assuming Mean-Variance
Optimization,"in On Exchange Rates. 1993.
COUNTRY RISK, SUPPLY OF DEBT TO EMERGING MARKET BORROWERS, AND DEBT DYNAMICS
Barry Eichengreen and Ashoka Mody, “Lending Booms, Reserves and the Sustainability of Short-Term Debt:
Inferences from the Pricing of Syndicated Bank Loans,” Journal of Development Economics, 2000.
WTP, 10th ed., pp.S47-S48.
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