Full metadata
Title
Stability and Social Welfare in International Lending Networks
Description
This paper examines the behavior of international lending networks a currency crisis, specifically focusing on connectivity as a differentiating factor between financial networks. The model consists of economies that borrow and lend capital in nominal units of the creditor's currency. A shock then leads to the depreciation of the currency of a single economy which causes exchange rate fluctuations throughout the financial network. This alters the nominal value of debts that economies are required to repay, potentially putting them at risk of default. The results show that the architecture of a financial network is an important factor in minimizing the number of defaults and maximizing total social welfare. An increase in connectivity among economies leads to both greater stability and greater total social welfare of a network, since diversification of liabilities decreases fluctuations in exchange rates.
Date Created
2017-05
Contributors
- Von Beringe, Konstantin (Author)
- Leiva Bertran, Fernando (Thesis director)
- Schenone, Pablo (Committee member)
- School of Mathematical and Statistical Sciences (Contributor, Contributor)
- Department of Economics (Contributor)
- Barrett, The Honors College (Contributor)
Topical Subject
Resource Type
Extent
42 pages
Language
eng
Copyright Statement
In Copyright
Primary Member of
Series
Academic Year 2016-2017
Handle
https://hdl.handle.net/2286/R.I.43770
Level of coding
minimal
Cataloging Standards
System Created
- 2017-10-30 02:50:58
System Modified
- 2021-08-11 04:09:57
- 3 years 2 months ago
Additional Formats