Essays on International Finance



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In the first article of this dissertation I estimate the effect of supply shocks to bank-lending on Argentinean region’s real activity. Supply shocks to bank-lending are identified through a procedure which exploits the geographical distribution of bank’s assets and liabilities. Using regional Value Added Tax receipts for 1998–2004, I find that a region facing a negative 1% supply shock to total bank-lending suffers a 1.6% output loss. In the data these shocks can explain a staggering output contraction of up to 9%. I document that the bulk of this result is accounted for by the contraction on the service sector. In the second chapter, using a variance decomposition of shocks to GDP, my co-authors and I quantify the role of international factor income, international transfers, and saving in achieving risk sharing during the recent European crisis. We focus on the sub-periods 1990–2007, 2008 2009, and 2010 and consider separately the European countries hit by the sovereign debt crisis in 2010. We decompose risk sharing from saving into contributions from government and private saving and show that fiscal austerity programs played an important role in hindering risk sharing during the sovereign debt crisis.



Bank Lending, Capital markets


Portions of this document appear in: Kalemli‐Ozcan, Sebnem, Emiliano Luttini, and Bent Sørensen. "Debt Crises and Risk‐Sharing: The Role of Markets versus Sovereigns." The Scandinavian Journal of Economics 116, no. 1 (2014): 253-276.