The original sin and the blessing trinity: An investigation

Ozmen E., Arinsoy D.

Journal of Policy Modeling, cilt.27, sa.5, ss.599-609, 2005 (SCI-Expanded) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 27 Sayı: 5
  • Basım Tarihi: 2005
  • Doi Numarası: 10.1016/j.jpolmod.2005.04.003
  • Dergi Adı: Journal of Policy Modeling
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.599-609
  • Orta Doğu Teknik Üniversitesi Adresli: Evet

Özet

We investigate the determinants of the fact that most countries cannot borrow internationally in their own currencies (original sin). Our results suggest that flexible exchange rates and strong macroeconomic policy stance with sound institutions are necessary but not sufficient for redemption from original sin. Original sin appears to be persistent and determined also by the variables which are beyond the sole control of individual countries. Consequently, redemption from it and satisfying the blessed trinity of international currency, flexible exchange rates and sound institutions may require an international initiative that will allow complete markets for all currencies meeting the necessary conditions. © 2005 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.