Small and medium enterprises across the globe: This database is unique in that it presents consistent and comparable information on the contribution of the SME sector to total employment and
Louis working papers are preliminary materials circulated to stimulate discussion and critical comment.
Recent Working Papers by Laura E. Kliesen, and Michael T. Owyang Working Paper A updated November We consider the effects of uncertainty shocks in a nonlinear VAR that allows uncertainty to have amplification effects.
When uncertainty is relatively low, fluctuations in uncertainty have small, linear effects. In periods of high uncertainty, the effect of a further increase in uncertainty is magnified. We find that uncertainty shocks in this environment have a more pronounced effect on real economic variables.
We also conduct counterfactual experiments to determine the channels through which uncertainty acts. Uncertainty propagates through both the household consumption channel and through businesses delaying investment, providing substantial contributions to the decline in GDP observed after uncertainty shocks.
Finally, we find evidence of the ability of systematic monetary policy to mitigate the adverse effects of uncertainty shocks. Manuelli and Juan M.
We assume that firms must access the bond market and they issue debt with a flexible structure coupon, face value, and maturity. Since lenders do not refinance projects with positive but small net present value, firms may be forced to default in the first phase.
We call this liquidity risk. The technology is such that earnings can switch to a higher but riskier level.
In this second phase firms have access to the equity market but they may default if this is the best option. We call this strategic default risk. In the model optimal maturity balances these two risks.
We show that firms with poor prospects and firms in more unstable industries will choose shorter maturities even if it is feasible to issue longer debt. The model also offers predictions on how asset maturity, asset salability, and leverage influence maturity.
Even though our model is extremely stylized we find that the predictions are roughly consistent with the evidence. Moreover, it offers some insights into the factors that determine the structure of the debt.
The empirical evidence also shows that a news shock has a significantly larger contemporaneous impact on sovereign credit spreads than a comparable shock to labor productivity. We develop a quantitative model of news and sovereign debt default with endogenous maturity choice that generates impulse responses very similar to the empirical estimates.
The model allows us to interpret the empirical evidence and to identify key parameters. We find that, first, the increase in sovereign yield spreads around a debt crisis episode is due mostly to the lower expected productivity following a bad news shock, and not to the borrowing choices of the government.
Second, a shorter debt maturity increases the chance that bad news shocks trigger a debt crisis.
Third, an increase in the precision of news allows the government to improve its debt maturity management, especially during periods of high financial stress, and thus face lower spreads and default risk while holding the amount of debt constant. Mendoza, and Paulina Restrepo-Echavarria Working Paper A updated October In this paper we document the stylized facts about the relationship between international oil price swings, sovereign risk and macroeconomic performance of oil-exporting economies.
We develop a small open economy model of sovereign risk with incomplete international financial markets, in which optimal oil extraction and sovereign default interact.
We use the model to understand the mechanisms behind the empirical facts, and show that it supports them.Outstanding research and analysis underpins everything we do, from policymaking to providing secure banknotes. The Bank aims to attract and develop world-class researchers and foster an environment that supports creative freedom and engagement with global research communities.
The Working Papers should not be reported as representing the views of the Banco Central do Brasil. The views expressed in the papers are those of the author(s) .
World Bank Policy Research Working Paper , August The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. Is It the Journey That Matters? A Fresh Look at the Impact of World Bank Policy Lending (English) This paper investigates the impact of World Bank development policy operations on the quality of economic policy during the period The Policy Research Working Paper Series disseminates findings of work in progress to encourage the exchange of ideas about development issues.
Titles are submitted from units around the World Bank for internal review and inclusion in this series which is managed by . Small and medium enterprises across the globe: a new database (English) Abstract.
This paper describes a new cross-country database on the importance of small and medium enterprises (SMEs).