Partial economic reforrns and financial crises: an emerging markets perspective

The recent emerging market experiences have posed a challenge to the conventional wisdom that unsustainable fiscal deficits are the key to understanding financial crises in these countries. The health of the domestic banking system has emerged as the main driving force behind the perverse dynamics of partial reforms. The current paper shares this view and uses a model of contractual inefliciencies in the banking sector to understand the dynamics of these reforms. We find that the threat of a large exchange rate devaluation depends on the stock of international reserves relative to the stock of domestic credit that must be extended by the Central Bank in response to a large capital outflow. Moreover, if a country has a weak banking sector but high net reserve ratios, the capital flow reversal might only increase the vulnerability to a currency crisis without necessarily causing it. The results are in accordance with much of the empiricalliterature on the determinants of financiaI crises in emerging markets. Some aspectsof the recent policy debate on the introduction of capital controls are also analysed.

Socio-economic vulnerability to natural disasters in Mexico: rural poor, trade and public response

Includes bibliography

Multilateral banking and development financing in a context of financial volatility

Includes bibliography

Macroeconomic success and social vulnerability: lessons for Latin America from the Celtic Tiger

Includes bibliography

Macroeconomic volatility and social vulnerability in Brazil: the Cardoso government (1995-2002) and perspectives

Includes bibliography

Insurance underwriter or financial development fund: what role for reserve pooling in Latin America?

Includes bibliography

United States interest rates, Latin American debt and financial contagion

Includes bibliography

Socio-demographic vulnerability: old and new risks for communities, households and individuals

Includes bibliography

Bankruptcy Costs, Liability Dollarization, and Vulnerability to Sudden Stops

Emerging market countries that have improved institutions and attained intermediate levels of institutional quality have experienced severe financial crises following capital flow reversals. However, there is also evidence that countries with strong institutions and deep capital markets are less affected by external shocks. We reconcile these two observations using a calibrated DSGE model that extends the financial accelerator framework developed in Bernanke, Gertler, and Gilchrist (1999). The model captures financial market institutional quality with creditors. ability to recover assets from bankrupt firms. Bankruptcy costs affect vulnerability to sudden stops directly but also indirectly by affecting the degree of liability dollarization. Simulations reveal an inverted U-shaped relationship between bankruptcy recovery rates and the output loss following sudden stops. We provide empirical evidence that this non-linear relationship exists.

Intra-regional trade between China, Japan, and Korea : before and after the financial crisis

East Asian economies have been heavily dependent on the U.S. and EU markets, especially for the export of final goods. Therefore, once the financial crisis hit Western economies hard, the East Asian economies lost their major markets.Their production networks then worked to the region's disadvantage and stifled industrial development.This reflects the vulnerability of the East Asian economies which have adopted an export-led growth strategy. Such vulnerability needs to be addressed to prevent future economic crises, as well as to sustain economic growth. This paper examines the trade structure of the three countries-China, Japan, and Korea-before and after the Lehman Shock, and discusses how the three countries should cooperate in addressing imbalances in the trade structure.

Using the damage from 2010 Haiti earthquake for calibrating vulnerability models of typical structures in Port-au-Prince (Haiti)

After the 2010 Haiti earthquake, that hits the city of Port-au-Prince, capital city of Haiti, a multidisciplinary working group of specialists (seismologist, geologists, engineers and architects) from different Spanish Universities and also from Haiti, joined effort under the SISMO-HAITI project (financed by the Universidad Politecnica de Madrid), with an objective: Evaluation of seismic hazard and risk in Haiti and its application to the seismic design, urban planning, emergency and resource management. In this paper, as a first step for a structural damage estimation of future earthquakes in the country, a calibration of damage functions has been carried out by means of a two-stage procedure. After compiling a database with observed damage in the city after the earthquake, the exposure model (building stock) has been classified and through an iteratively two-step calibration process, a specific set of damage functions for the country has been proposed. Additionally, Next Generation Attenuation Models (NGA) and Vs30 models have been analysed to choose the most appropriate for the seismic risk estimation in the city. Finally in a next paper, these functions will be used to estimate a seismic risk scenario for a future earthquake.

The long haul: managing exit from financial assistance. Bruegel Policy Contribution Issue 2014/03, 20 February 2014

Countries can make a clean exit from financial assistance, or enter a new programme or a precautionary programme, depending on the sustainability of their public debt and their vulnerability to shocks. Ireland made a clean exit in December 2013, supported by significant budgetary and current-account adjustment and signs of economic recovery. But Irish debt sustainability is not guaranteed and prudence will be needed to avoid future difficulties. A clean exit for Portugal is not recommended when its programme ends in May 2014, because compared to Ireland it faces higher interest rates, has poorer growth prospects and has probably less ability to generate a consistently high primary surplus. A precautionary arrangement would be advisable. In case debt sustainability proves difficult to achieve later, some form of debt restructuring may prove necessary. It is unlikely that Greece will be able to exit its programme in December 2014. A third programme should be put in place to take Greece out of the market until 2030, accompanied by enhanced budgetary and structural reform commitments by Greece, a European boost to economic growth in the euro-area periphery and willingness on the part of lenders to reduce loan charges below their borrowing costs, should public debt levels prove unsustainable despite Greece meeting the loan conditions. Even assuming all goes well, the three countries will be subject to enhanced post-pro-gramme surveillance for decades. Managing such long-term relationships will be a key challenge.

Community Vulnerability and Adaptation to Climate Change in East Palo Alto

Climate change and sea level rise continue to devastate communities around the globe. The impacts have a disproportionate effect on those of lower socio-economic levels, and the consequences are frequently not borne equally amongst impacted individuals (UNDP, 2013). Community-based adaptation has been widely used to assess vulnerabilities and impacts at the community level, with an inclusive process that addresses root causes of risk. The process provides the opportunity for local government to empower and engaged impacted communities in identifying and prioritizing their urgent adaptation needs. This study aims to understand East Palo Alto community vulnerabilities by assessing local knowledge and perception of risk to climate change. East Palo Alto, an urban city in California with socio-economic challenges, is vulnerable to flooding and coastal inundation. The limited financial and institutional capacity of the local government and community increases vulnerability and risk. Recommendations and steps are presented to guide actions and programs that are crucial in addressing community priorities and concerns.

Community Vulnerability and Adaptation to Climate Change in East Palo Alto

Climate change and sea level rise continue to devastate communities around the globe. The impacts have a disproportionate effect on those of lower socio-economic levels, and the consequences are frequently not borne equally amongst impacted individuals (UNDP, 2013). Community-based adaptation has been widely used to assess vulnerabilities and impacts at the community level, with an inclusive process that addresses root causes of risk. The process provides the opportunity for local government to empower and engaged impacted communities in identifying and prioritising their urgent adaptation needs. This study aims to understand East Palo Alto community vulnerabilities by assessing local knowledge and perception of risk to climate change. East Palo Alto, an urban city in California with socio- economic challenges, is vulnerable to flooding and coastal inundation. The limited financial and institutional capacity of the local government and community increases vulnerability and risk. Recommendations and steps are presented to guide actions and programs that are crucial in addressing community priorities and concerns

The expression of vulnerability through infant mortality in the municipality of Embu

CONTEXTO E OBJETIVO: A mortalidade infantil expressa uma conjunção de fatores relacionados às condições de vida, trabalho e acesso aos serviços de saúde, e a identificação desses fatores pode contribuir para definição de intervenções em saúde. O objetivo deste trabalho foi analisar a expressão da vulnerabilidade e conseqüentes diferenças de acesso aos serviços de saúde e na ocorrência de óbitos em menores de um ano no município do Embu. TIPO DE ESTUDO E LOCAL: Estudo descritivo, no município de Embu. MÉTODOS: Foram coletados dados secundários (declarações de óbitos) e primários (entrevistas a famílias de crianças residentes do município do Embu, falecidas nos anos de 1996 e 1997, antes de completarem um ano). Variáveis estudadas foram relacionadas às condições de vida, renda e trabalho, à assistência pré-natal, ao parto e à atenção à saúde da criança, as quais foram comparadas com resultados obtidos em estudo realizado no ano de 1996. RESULTADOS: Verificaram-se diferenças estatisticamente significantes quanto a renda, trabalho sem carteira assinada e acesso a plano privado de saúde entre famílias de crianças que foram ao óbito. Verificaram-se, também, diferenças quanto ao acesso e à qualidade da assistência pré-natal, à freqüência de baixo peso ao nascer e a intercorrências neonatais. CONCLUSÕES: A situação de emprego/desemprego foi decisiva na determinação da estabilidade familiar, conferindo maior vulnerabilidade para ocorrência de óbitos infantis, somada às condições de acesso e à qualidade dos serviços de saúde