Macroprudential vs. ex-post policy interventions : when domestic taxes are relevant for international lenders

Borradores de Economia
Number: 
879
Published: 
Classification JEL: 
H23, D62, F34, F41
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

We argue that international lenders take into account that taxes (or subsidies) affect borrowers’income available for debt repayments. Using an endowment-economy model, we show that by incorporating this fact into the analysis of …financial crises from th