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Projects - Details  
  Moral Hazard, Political Economy, Behavioural Approaches in International Finance

Dr Lei Zhang
Professor S Ghosal
Dr E Kohlscheen
University of Warwick

Dr Lei Zhang
Department of Economics
University of Warwick

Tel: 02476 522983
email: L.Zhang@warwick.ac.uk

Duration of Research
March 2005 - February 2008

The proposed research is divided into three areas: First we investigate the sovereign debt crisis as a result of bargaining between creditors and debtors when moral hazard interacts with debtor coordination. Here we look at how a particular international financial architecture (such as CACs) and international institutions (such as IMF) can affect the crisis. Second, we plan to investigate how particular political institutions (parliamentary vs presidential) affect the incentives of the sovereign borrowers. We look at specific policy to improve the stability and predictability of credit markets. Third, we incorporate recent advances in behavioural economics to exchange rate determination to provide an alternative micro foundation for excess volatility. We attempt to identify appropriate policy to curb short run volatility.

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Remarks, comments and contributions are welcome at: t.byne@econ.bbk.ac.uk
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Last updated November 2005
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