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Money market. Capital market --- France --- Capital market --- Interest rates --- Capital market - France. --- Interest rates - France.

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Nominal interest rate pegging leads to instability in an IS-LM model with a vertical long-run Phillips curve and backward-looking inflation expectations. However, it does not lead to instability in several large multicountry econometric models, apparently primarily because these models have nonvertical long-run Phillips curves. Nominal interest rate pegging leads to price level and output indeterminacy in a model with staggered contracts and rational expectations. However, when a class of money supply rules with interest rate smoothing is introduced, and interest rate pegging is viewed as the limit of interest rate smoothing, the price level and output are determinate.

Banks and Banking --- Deflation --- Economic theory & philosophy --- Economic Theory --- Economic theory --- Expectations --- Finance --- Financial services --- Inflation --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- Macroeconomics --- Monetary base --- Monetary economics --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Money and Monetary Policy --- Money supply --- Money --- Price Level --- Prices --- Rational expectations --- Real interest rates --- Short term interest rates --- Speculations --- United States

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The purpose of this paper is to analyze the argument that debt relief would increase the incentive of a debtor country to make an adjustment effort (to invest) and that for this reason creditors may benefit by granting relief. It is shown that there are actually opposing incentive effects of debt relief and that the argument could be valid in particular circumstances. A distinction is made between exogenous and endogenous relief, the latter compelled by low capacity to pay caused by low investment earlier.

Banks and Banking --- Consumption --- Debt Management --- Debt relief --- Debt service payments --- Debt service --- Debt --- Debts, External --- Economics --- Exports and Imports --- Finance --- Financial Risk Management --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- International economics --- International Lending and Debt Problems --- Macroeconomics --- Macroeconomics: Consumption --- Real interest rates --- Saving --- Sovereign Debt --- Wealth

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This paper uses an intertemporal optimizing model of a small open economy to analyze how terms of trade changes affect real exchange rates and the trade balance. We consider temporary current, anticipated future, and permanent changes in the terms of trade. The results suggest that the relationship between the terms of trade and the current account (the so-called Harberger-Laursen-Metzler effect) may be quite sensitive to whether or not the model incorporates nontraded goods. Thus, the real exchange rate may be an important variable through which terms of trade shocks are transmitted to the current account.

Balance of trade --- Banks and Banking --- Consumption --- Currency --- Economic policy --- Economics --- Empirical Studies of Trade --- Exports and Imports --- Finance --- Foreign Exchange --- Foreign exchange --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- International economics --- Macroeconomics --- Macroeconomics: Consumption --- Nternational cooperation --- Real exchange rates --- Real interest rates --- Saving --- Terms of trade --- Trade balance --- Wealth

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This paper surveys the evolution of the Chilean financial system from 1975 to 1985, analyzes the causes and the consequences of the major crisis in the financial system during 1981-83, and examines the measures adapted to contain the crisis and restore the financial system to normalcy. The analysis suggests that certain features of the financial sector--growing loans of dubious quality, limited central bank supervision--raised the vulnerability of the sector to the external shocks and macroeconomic policy changes experienced by Chile. Channels through which financial sector troubles may have exacerbated the impact of real shocks are also explored.

Bank credit --- Banking --- Banks and Banking --- Banks and banking --- Banks --- Commercial banks --- Credit --- Depository Institutions --- Economic & financial crises & disasters --- Finance --- Financial Crises --- Financial crises --- Financial institutions --- Financial Risk Management --- Financial services --- Industries: Financial Services --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- Loans --- Micro Finance Institutions --- Monetary economics --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Money and Monetary Policy --- Money --- Mortgages --- Real interest rates --- Chile