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Replication data for: Financial Liberalization, Debt Mismatch, Allocative Efficiency, and Growth

Version
V0
Resource Type
Dataset
Creator
  • Rancière, Romain
  • Tornell, Aaron
Publication Date
2015-12-31
Description
  • Abstract

    Financial liberalization increases growth, but leads to more crises and costly bailouts. We present a two-sector model in which liberalization, by allowing debt-denomination mismatch, relaxes borrowing limits in the financially constrained sector, but endogenously generates crisis risk. When regulation restricts external financing to standard debt, liberalization preserves financial discipline and may increase allocative efficiency, growth, and consumption possibilities. By contrast, under unfettered liberalization that also allows uncollateralized option-like liabilities, discipline breaks down, and efficiency falls. The model yields a testable gains-from-liberalization condition, which holds in emerging markets. It also helps rationalize the contrasting experience of emerging markets and the recent US housing crisis. (JEL E23, E44, G01, G21, G28, O41, R31)
Availability
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Relations
  • Is supplemented by
    DOI: 10.1257/mac.20130190 (Text)
Publications
  • Rancière, Romain, and Aaron Tornell. “Financial Liberalization, Debt Mismatch, Allocative Efficiency, and Growth.” American Economic Journal: Macroeconomics 8, no. 2 (April 2016): 1–44. https://doi.org/10.1257/mac.20130190.
    • ID: 10.1257/mac.20130190 (DOI)

Update Metadata: 2019-10-13 | Issue Number: 1 | Registration Date: 2019-10-13

Rancière, Romain; Tornell, Aaron (2015): Replication data for: Financial Liberalization, Debt Mismatch, Allocative Efficiency, and Growth. Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E114072