Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10479247 | Journal of Policy Modeling | 2005 | 11 Pages |
Abstract
We investigate the determinants of the fact that most countries cannot borrow internationally in their own currencies (original sin). Our results suggest that flexible exchange rates and strong macroeconomic policy stance with sound institutions are necessary but not sufficient for redemption from original sin. Original sin appears to be persistent and determined also by the variables which are beyond the sole control of individual countries. Consequently, redemption from it and satisfying the blessed trinity of international currency, flexible exchange rates and sound institutions may require an international initiative that will allow complete markets for all currencies meeting the necessary conditions.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Erdal Ãzmen, Deniz Arınsoy,