000			01069nam a22001337a 4500
999			_c515656 _d515656
008			210203b ||||| |||| 00| 0 eng d
245			_aFinancial crises, dollarization, and lending of last resort in open economies
260			_aThe American Economic Review
300			_a110(8), Aug, 2020: p.2524-2557
520			_aForeign currency debt is considered a source of financial instability in emerging markets. We propose a theory in which liability dollarization arises from an insurance motive of domestic savers. Since financial crises are associated to depreciations, savers ask for a risk premium when saving in local currency. This force makes domestic currency debt expensive, and incentivizes borrowers to issue foreign currency debt. Providing ex post support to borrowers can alleviate the effect of the crisis on savers' income, lowering their demand for insurance, and, surprisingly, it can reduce ex ante incentives to borrow in foreign currency. – Reproduced
773			_aThe American Economic Review 1
906			_aDEBTS, EXTERNAL
942			_cAR