Andrew Powell - Academia.edu (original) (raw)
Papers by Andrew Powell
SSRN Electronic Journal, 1996
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
Theory suggests both resilience and fragility in banking networks. This paper finds both, exploit... more Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The global financial crisis and the appearance of South-South lenders prompted a decline in network centrality, suggesting greater resilience to normal shocks. Multilateral Development Banks may play a catalytic role, but their small size limits their ability to mitigate shock propagation. The ongoing Covid-19 crisis is not a normal shock, is hitting central players and will likely provoke significant contagion.
Journal of Banking & Finance, 2014
Several European countries face challenges reminiscent of those faced by the emerging economies o... more Several European countries face challenges reminiscent of those faced by the emerging economies of Latin America. The economic booms in some peripheral Euro-zone countries financed by large capital inflows; the credit and asset price booms and then the busts including Sudden Stops in capital flows; the strong interaction between sovereign debt and domestic banking systems; the role of foreign banks and contagion; and all in the context of a fixed exchange rate, are familiar plotlines for Latin American audiences. For those Euro-zone countries that built up large Euro-denominated external liabilities, Latin America's experience is particularly relevant and worrisome. Still, Europe may be in a better position to navigate a path out of the crisis given cooperative mechanisms that were absent in Latin America, particularly the availability of massive liquidity support. Nonetheless, while such support buys time, it does not guarantee success. This paper argues that reflecting on Latin America's experience provides useful lessons for Europe to improve the chances for a successful resolution.
SSRN Electronic Journal, 2006
Multilateral intermediation of foreign aid : what is the trade-off for donor countries? / by Andr... more Multilateral intermediation of foreign aid : what is the trade-off for donor countries? / by Andrew Powell, Matteo Bobba. p. cm. (Research Department Working paper series ; 594) Includes bibliographical references. 1. Economic assistance-Developing countries. 2. International cooperation. I. Bobba,
SSRN Electronic Journal, 2007
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
Brookings Trade Forum, 2002
This paper contends that the recent financial crisis in Argentina was avoidable. Until the end of... more This paper contends that the recent financial crisis in Argentina was avoidable. Until the end of 2000, and arguably even until the second quarter of 2001, a fiscal adjustment would have substantially improved Argentina's situation, but the country achieved virtually none. The root of the crisis was the interaction between bad luck; moderate but certainly required fiscal adjustment; slow deflationary and recessionary current-account adjustment process; and, very importantly, extremely messy politics. These interactions can also be thought of as vicious, self-enforcing cycles, suggesting potential multiple equilibria, both within the economic variables and between the economy and politics. A vector autoregression (VAR) analysis indicates significant interrelations between key economic and variables and politics. For its part, the IMF was caught between a growing concern regarding moral hazard and the possibility of a run. This more structural explanation to Argentine-IMF relations suggests that the international financial architecture is still incomplete, and further creative thought is required to contain the incentives for countries in such unfortunate positions to pursue more risky policies as default becomes more likely.
Journal of Development Economics, 1998
This paper explains public saving and investment in economies where many groups compete for scarc... more This paper explains public saving and investment in economies where many groups compete for scarce public funds. We show that there is a collective action problem. If there is no strong center, then this problem manifests itself in a very low savings and investment rates. In the extreme, current spending may be determined simply by the current tax income and access to borrowing. This explains why in the face of a temporary boom, governments may not save but may even borrow more to finance even higher levels of expenditure. We Ž deal also with several mitigating factors repetition, insiders-outsiders interaction, elections ns .
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
Initially commodity-contingent debt contracts appear to work best when a group of creditors have ... more Initially commodity-contingent debt contracts appear to work best when a group of creditors have co: .rol over the total amount lent, rather than when a single lender acts in isolation. Should a multinational institution take the lead in developing a market for them? Mme Policy, Planning nd Research Complet distributes PPR Waking papers to dissminate tbe findings of wok in progress and to enaouge die exchange of ides among Bank ssf and al othes interested in development issues. lhese pap.s cany the names af the audiors, relect only ther views, and should be used and cited accordingly. The findings, intezprctation, and conclusions are the author.' own. They should not be attributed to the World Bank. its Board of Direcs, its management. or any of its manber contites.
We propose a new test, derived from a set of variance decompositions of a structural VAR, for the... more We propose a new test, derived from a set of variance decompositions of a structural VAR, for the success of inflation targeting. In contrast to standard sacrifice ratios this test considers changes in the structure of real and nominal shocks; second moment effects. We find strong support for IT with 7 of the 9 countries in our sample having negative "sacrifices" and many countries with "benefits". However, we also find very different performances across IT countries. We find that "IT success" depends on the size of the real shocks suffered but controlling for this there are differences in country performance.
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
Journal of International Money and Finance, 2003
Policy Research Working Papers, 2019
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Economic Inquiry, 2017
The financial crisis of 2008-2009 revived attention given to booms and busts in bank credit, and ... more The financial crisis of 2008-2009 revived attention given to booms and busts in bank credit, and their effects on real activity. This interest sparked two different strands of research in macro. The first one focuses on monetary policy in the context of financial frictions. The second studies capital regulation in banking. To the best of our knowledge, so far these two topics have mostly been studied in isolation from each other. Thus, we still lack an understanding of how monetary policy and bank capital regulation interact in the presence of financial fragility. This paper aims to contribute to furthering this understanding. Specifically, we ask how the monetary policy rule should look like in the presence of cyclical capital requirements. We extend the dynamic stochastic general equilibrium model with bank capital in Aliaga-Díaz and Olivero by introducing price rigidities in the spirit of the New-Keynesian literature. We find that: First, anticyclical requirements have important stabilization properties relative to the case of constant requirements. This is true for all types of fluctuations that we study, which include those caused by productivity, preference, fiscal, monetary, and financial shocks. Second, output and consumption volatilities present in the no regulation economy can be recovered with anti-cyclical requirements as long as the policy rate responds only slightly to credit spreads. Third, monetary policy rules that respond to credit conditions also perform better in terms of welfare. (JEL E32, E44) * The first draft of this paper was written while María Pía Olivero was a visiting scholar at the Research Department of the Federal Reserve Bank of Philadelphia and at the University of Melbourne in Australia. She thanks both institutions for their hospitality. This paper does not represent the views of either the Inter-American Development Bank or the Vanguard Group, Inc.
This Discussion Paper is issued under the auspices of the Centre's research programme in INTERNAT... more This Discussion Paper is issued under the auspices of the Centre's research programme in INTERNATIONAL MACROECONOMICS AND FINANCE. Any opinions expressed here are those of the author(s) and not those of the Centre for Economic Policy Research. Research disseminated by CEPR may include views on policy, but the Centre itself takes no institutional policy positions. The Centre for Economic Policy Research was established in 1983 as an educational charity, to promote independent analysis and public discussion of open economies and the relations among them. It is pluralist and non partisan, bringing economic research to bear on the analysis of medium and long run policy questions. These Discussion Papers often represent preliminary or incomplete work, circulated to encourage discussion and comment. Citation and use of such a paper should take account of its provisional character.
SSRN Electronic Journal, 1996
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
Theory suggests both resilience and fragility in banking networks. This paper finds both, exploit... more Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The global financial crisis and the appearance of South-South lenders prompted a decline in network centrality, suggesting greater resilience to normal shocks. Multilateral Development Banks may play a catalytic role, but their small size limits their ability to mitigate shock propagation. The ongoing Covid-19 crisis is not a normal shock, is hitting central players and will likely provoke significant contagion.
Journal of Banking & Finance, 2014
Several European countries face challenges reminiscent of those faced by the emerging economies o... more Several European countries face challenges reminiscent of those faced by the emerging economies of Latin America. The economic booms in some peripheral Euro-zone countries financed by large capital inflows; the credit and asset price booms and then the busts including Sudden Stops in capital flows; the strong interaction between sovereign debt and domestic banking systems; the role of foreign banks and contagion; and all in the context of a fixed exchange rate, are familiar plotlines for Latin American audiences. For those Euro-zone countries that built up large Euro-denominated external liabilities, Latin America's experience is particularly relevant and worrisome. Still, Europe may be in a better position to navigate a path out of the crisis given cooperative mechanisms that were absent in Latin America, particularly the availability of massive liquidity support. Nonetheless, while such support buys time, it does not guarantee success. This paper argues that reflecting on Latin America's experience provides useful lessons for Europe to improve the chances for a successful resolution.
SSRN Electronic Journal, 2006
Multilateral intermediation of foreign aid : what is the trade-off for donor countries? / by Andr... more Multilateral intermediation of foreign aid : what is the trade-off for donor countries? / by Andrew Powell, Matteo Bobba. p. cm. (Research Department Working paper series ; 594) Includes bibliographical references. 1. Economic assistance-Developing countries. 2. International cooperation. I. Bobba,
SSRN Electronic Journal, 2007
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
Brookings Trade Forum, 2002
This paper contends that the recent financial crisis in Argentina was avoidable. Until the end of... more This paper contends that the recent financial crisis in Argentina was avoidable. Until the end of 2000, and arguably even until the second quarter of 2001, a fiscal adjustment would have substantially improved Argentina's situation, but the country achieved virtually none. The root of the crisis was the interaction between bad luck; moderate but certainly required fiscal adjustment; slow deflationary and recessionary current-account adjustment process; and, very importantly, extremely messy politics. These interactions can also be thought of as vicious, self-enforcing cycles, suggesting potential multiple equilibria, both within the economic variables and between the economy and politics. A vector autoregression (VAR) analysis indicates significant interrelations between key economic and variables and politics. For its part, the IMF was caught between a growing concern regarding moral hazard and the possibility of a run. This more structural explanation to Argentine-IMF relations suggests that the international financial architecture is still incomplete, and further creative thought is required to contain the incentives for countries in such unfortunate positions to pursue more risky policies as default becomes more likely.
Journal of Development Economics, 1998
This paper explains public saving and investment in economies where many groups compete for scarc... more This paper explains public saving and investment in economies where many groups compete for scarce public funds. We show that there is a collective action problem. If there is no strong center, then this problem manifests itself in a very low savings and investment rates. In the extreme, current spending may be determined simply by the current tax income and access to borrowing. This explains why in the face of a temporary boom, governments may not save but may even borrow more to finance even higher levels of expenditure. We Ž deal also with several mitigating factors repetition, insiders-outsiders interaction, elections ns .
The views and interpretations in this document are those of the authors and should not be attribu... more The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. This paper may be freely reproduced provided credit is given to the Research Department, Inter-American Development Bank. The Research Department (RES) produces a quarterly newsletter, IDEA (Ideas for Development in the Americas), as well as working papers and books on diverse economic issues.
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
Initially commodity-contingent debt contracts appear to work best when a group of creditors have ... more Initially commodity-contingent debt contracts appear to work best when a group of creditors have co: .rol over the total amount lent, rather than when a single lender acts in isolation. Should a multinational institution take the lead in developing a market for them? Mme Policy, Planning nd Research Complet distributes PPR Waking papers to dissminate tbe findings of wok in progress and to enaouge die exchange of ides among Bank ssf and al othes interested in development issues. lhese pap.s cany the names af the audiors, relect only ther views, and should be used and cited accordingly. The findings, intezprctation, and conclusions are the author.' own. They should not be attributed to the World Bank. its Board of Direcs, its management. or any of its manber contites.
We propose a new test, derived from a set of variance decompositions of a structural VAR, for the... more We propose a new test, derived from a set of variance decompositions of a structural VAR, for the success of inflation targeting. In contrast to standard sacrifice ratios this test considers changes in the structure of real and nominal shocks; second moment effects. We find strong support for IT with 7 of the 9 countries in our sample having negative "sacrifices" and many countries with "benefits". However, we also find very different performances across IT countries. We find that "IT success" depends on the size of the real shocks suffered but controlling for this there are differences in country performance.
In nv ve es st ti ig ga ac ci ió ón n e en n F Fi in na an nz za as s
Journal of International Money and Finance, 2003
Policy Research Working Papers, 2019
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Economic Inquiry, 2017
The financial crisis of 2008-2009 revived attention given to booms and busts in bank credit, and ... more The financial crisis of 2008-2009 revived attention given to booms and busts in bank credit, and their effects on real activity. This interest sparked two different strands of research in macro. The first one focuses on monetary policy in the context of financial frictions. The second studies capital regulation in banking. To the best of our knowledge, so far these two topics have mostly been studied in isolation from each other. Thus, we still lack an understanding of how monetary policy and bank capital regulation interact in the presence of financial fragility. This paper aims to contribute to furthering this understanding. Specifically, we ask how the monetary policy rule should look like in the presence of cyclical capital requirements. We extend the dynamic stochastic general equilibrium model with bank capital in Aliaga-Díaz and Olivero by introducing price rigidities in the spirit of the New-Keynesian literature. We find that: First, anticyclical requirements have important stabilization properties relative to the case of constant requirements. This is true for all types of fluctuations that we study, which include those caused by productivity, preference, fiscal, monetary, and financial shocks. Second, output and consumption volatilities present in the no regulation economy can be recovered with anti-cyclical requirements as long as the policy rate responds only slightly to credit spreads. Third, monetary policy rules that respond to credit conditions also perform better in terms of welfare. (JEL E32, E44) * The first draft of this paper was written while María Pía Olivero was a visiting scholar at the Research Department of the Federal Reserve Bank of Philadelphia and at the University of Melbourne in Australia. She thanks both institutions for their hospitality. This paper does not represent the views of either the Inter-American Development Bank or the Vanguard Group, Inc.
This Discussion Paper is issued under the auspices of the Centre's research programme in INTERNAT... more This Discussion Paper is issued under the auspices of the Centre's research programme in INTERNATIONAL MACROECONOMICS AND FINANCE. Any opinions expressed here are those of the author(s) and not those of the Centre for Economic Policy Research. Research disseminated by CEPR may include views on policy, but the Centre itself takes no institutional policy positions. The Centre for Economic Policy Research was established in 1983 as an educational charity, to promote independent analysis and public discussion of open economies and the relations among them. It is pluralist and non partisan, bringing economic research to bear on the analysis of medium and long run policy questions. These Discussion Papers often represent preliminary or incomplete work, circulated to encourage discussion and comment. Citation and use of such a paper should take account of its provisional character.