【主题】Financial Crises, Bailouts and Monetary Policy in Open Economies
【摘要】I jointly study the optimal bailout policy and monetary policy in open economies that borrow in foreign currency from international lenders. A policy dilemma emerges in financial crises. Policy-makers tradeoff the benefit of more bailouts alleviating firms’ financial constraints against the cost of larger currency devaluation, which tightens firms’ financial constraints. I embed the optimal bailout in an otherwise standard “sudden stop” model with nominal rigidities. The model sheds light on the role of bailouts and currency mismatch in driving the exchange rate, firms’ balance sheets and economic recovery. Quantitatively, the model matches key business cycle moments; in particular, it also captures the empirical relationship between foreign currency debt level and the extent of currency devaluation in financial crisis episodes. A welfare evaluation shows that there are in general welfare gains from the bailout policy despite exante moral hazard problems of firms.