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Daily Archives: July 14, 2011

A General Equilibrium Model of Sovereign Default and Business Cycles

A General Equilibrium Model of Sovereign Default and Business Cycles – Enrique G. Mendoza and Vivian Z. Yue – IMF Working Paper, Research Department. July 2011

  • “Emerging markets business cycle models treat default risk as part of an exogenous interest rate on working capital, while sovereign default models treat income fluctuations as an exogenous endowment process with ad-noc default costs. We propose instead a general equilibrium model of both sovereign default and business cycles. In the model, some imported inputs require working capital financing; default on public and private obligations occurs simultaneously. The model explains several features of cyclical dynamics around default triggers an efficiency loss as these inputs are replaced by imperfect substitutes; and default on public and private obligations occurs simultaneously. The model explains several features of cyclical dynamics around deraults, countercyclical spreads, high debt ratios, and key business cycle moments.”
  • New GAO Reports: Children's Television Act, Defense Logistics, DOD Civilian Personnel, Dodd-Frank Act, EPA Health Risk Assessments

    Children’s Television Act: FCC Could Improve Efforts to Oversee Enforcement and Provide Public Information, GAO-11-659, July 14, 2011 Commonwealth of the Northern Mariana Islands – Status of Transition to Federal Immigration Law, GAO-11-805T, July 14, 2011 Defense Logistics: Oversight and a Coordinated Strategy Needed to Implement the Army Workload and Performance System, GAO-11-566R, July 14,… Continue Reading

    The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit

    The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit – As requested by Senators Kent Conrad and Jeff Sessions, Chairman and Ranking Member of the Senate Budget Committee, July 14, 2011 “The federal government’s debt has increased dramatically in the past few years, and large annual budget deficits will… Continue Reading

    S&P : Special Report: U.S. Negative CreditWatch Placement And The Knock-On Effects

    “Standard & Poor’s Ratings Services today said it placed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the United States of America on CreditWatch with negative implications. The CreditWatch action reflects our view of two separate but related issues. The first issue is the continuing failure to raise the U.S. government debt ceiling… Continue Reading

    New FTC Video Helps Businesses Comply with CAN-SPAM Rule

    News release: “Say “spam” and most business executives think of annoying e-mail messages, like the ones that hold out a phony offer to split $50 million that’s sitting in a foreign bank. Of course, this type of message is covered by the Federal Trade Commission’s CAN-SPAM Rule, which is designed to protect consumers from deceptive… Continue Reading

    FTC Testifies on Protecting Consumers' Privacy

    “The Federal Trade Commission today told Congress that protecting consumers’ privacy – through law enforcement, education and policy initiatives – is a top priority at the agency. In delivering Commission testimony before the House Committee on Energy and Commerce Subcommittees on Commerce, Manufacturing, and Trade, and Communications and Technology, Commissioner Edith Ramirez said, “Privacy has… Continue Reading

    BLS Producer Price Index June 2011

    “The Producer Price Index for finished goods decreased 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decline followed increases of 0.2 percent in May and 0.8 percent in April. At the earlier stages of processing, prices received by manufacturers of intermediate goods were unchanged in June, and the… Continue Reading

    OECD Regions at a Glance 2011

    “The differences between countries are often not as great as the disparities within them. OECD Regions at a Glance makes these differences across “places” apparent and unpacks what they imply for national performance and individual welfare. It does so by providing region-by-region indicators that help to identify areas that are outperforming or lagging behind in… Continue Reading

    Department of Defense Strategy for Operating in Cyberspace

    Department of Defense Strategy for Operating in Cyberspace, July 2011 “…the Department of Defense (DoD) depends on cyberspace to function. It is difficult to overstate this reliance; DoD operates over 15,000 networks and seven million computing devices across hundreds of installations in dozens of countries around the globe. DoD uses cyberspace to enable its military,… Continue Reading