Deadly Debt Crises: COVID-19 in Emerging Markets

IF 5.9 1区 经济学 Q1 ECONOMICS Review of Economic Studies Pub Date : 2023-05-25 DOI:10.1093/restud/rdad058
Cristina Arellano, Yan Bai, Gabriel Mihalache
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引用次数: 2

Abstract

Abstract Emerging markets have experienced large human and economic costs from coronavirus disease 2019, and their tight fiscal space has limited the support extended to their citizens. We study the impact of an epidemic on economic and health outcomes by integrating epidemiological dynamics into a sovereign default model. The sovereign’s option to default tightens fiscal space and results in an epidemic with limited mitigation and depressed consumption. A quantitative analysis of our model accounts well for the dynamics of fatalities, social distancing, consumption, sovereign debt, and spreads in Latin America. We find that because of default risk, the welfare cost of the pandemic is about a third higher than it is in a version of the model with perfect financial markets. We study debt relief programs and find a compelling case for their implementation. These programs deliver large social gains, improving health and economic outcomes for the country at no cost to international lenders or financial institutions.
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致命的债务危机:新兴市场的COVID-19
新兴市场因2019年冠状病毒病而付出了巨大的人力和经济代价,其紧缩的财政空间限制了向其公民提供的支持。我们通过将流行病学动态整合到主权违约模型中来研究流行病对经济和健康结果的影响。主权债务违约的选择收紧了财政空间,导致债务泛滥,缓解措施有限,并抑制了消费。对我们模型的定量分析很好地解释了拉丁美洲死亡人数、社会距离、消费、主权债务和利差的动态。我们发现,由于存在违约风险,疫情的福利成本比具有完美金融市场的模型高出约三分之一。我们研究了债务减免计划,并找到了实施这些计划的令人信服的理由。这些项目带来了巨大的社会效益,改善了该国的健康和经济成果,而国际贷款机构或金融机构无需为此付出任何代价。
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来源期刊
CiteScore
10.40
自引率
3.40%
发文量
75
期刊介绍: Founded in 1933 by a group of young British and American economists, The Review of Economic Studies aims to encourage research in theoretical and applied economics, especially by young economists. Today it is widely recognised as one of the core top-five economics journals. The Review is essential reading for economists and has a reputation for publishing path-breaking papers in theoretical and applied economics. The Review is committed to continuing to publish strong papers in all areas of economics. The Editors aim to provide an efficient and high-quality review process to the Review''s authors. Where articles are sent out for full review, authors receive careful reports and feedback. Since 1989 The Review has held annual May Meetings to offer young students in economics and finance the chance to present their research to audiences in Europe.
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