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The nature of the microeconomic frictions that transform sudden stops in output collapses is not only of academic interest, but also crucial for the correct design of policy responses to prevent and address these episodes and the lack of evidence on this regard is an important shortcoming. This paper uses industry-level data in a sample of 45 developed and emerging countries and a differences-in-differences methodology to provide evidence of the role of financial frictions for the consequences of sudden stops. The results show that, consistently with financial frictions being important, industries that are more dependent on external finance decline significantly more during a sudden stop, especially in less financially developed countries. The results are robust to controlling for other possible mechanisms, including labor market frictions. The paper also provides results on the role of comparative advantage during sudden stops and on the usefulness of various policy responses to attenuate the consequences of these shocks.

Access to Finance --- Capital Flows --- Currencies and Exchange Rates --- Debt Markets --- Development Policy --- Economic Theory & Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial Frictions --- Infrastructure Economics and Finance --- Macroeconomics and Economic Growth --- Microeconomic Frictions --- Sudden Stops

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Zonder onderwerpscode: economie

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Why do firms and banks hold foreign currency denominated liabilities? Cowan and Do argue that foreign currency debt, by altering the effect of a devaluation on output, has a disciplining effect when the Central Bank's objectives differ from the social optimum. However, under imperfect information, bad priors about the Central Bank induce excess dollarization of liabilities, which in turn limits the ability of the Central Bank to conduct an optimal monetary policy. In addition the economy may become stuck in a "dollarization trap" in which dollarized liabilities limit the ability of agents to learn the true type of the monetary authority. The model has clear-cut policy implications regarding the taxation of foreign currency liabilities as a way to encourage perfect information and avoid dollarization traps. Moreover, it reinforces the existing argument for Central Bank independence. Finally, the authors believe this model to be consistent with a growing empirical literature on the determinants of foreign currency liabilities and their relationships to Central Bank credibility. This paper--a product of the Poverty Team, Development Research Group--is part of a larger effort in the group to understand the determinants of financial fragility.

Dollarization.

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De ontwerpmethode in Ontwerpen van Technische Innovaties bestaat uit een praktisch uitgewerkt stappenplan en legt de nadruk op de vijf essentiële ingrediënten van technisch innoveren: samenwerken, onderzoeken, creatief denken, experimenteren en ondernemen. Dit studieboek is breed inzetbaar.

ontwerpproces --- innovatieve technologie --- (zie ook: procesontwerp) --- innovatie --- ondernemen --- technologie --- technologische innovatie --- PXL-Tech 2019 --- ontwerpmethodiek --- elektrotechnieken --- technische constructies --- 658.5 --- Ontwerpen --- onderzoek --- Creativiteit --- Samenwerken --- Productontwikkeling. --- Marketing. --- Innovatie ; ondernemingen. --- Marktonderzoek.