e-mail: galina.hale@yale.edu
SSRN author page link
Papers published:
"Flight to Quality: Investor Risk Tolerance and the Spread of
Emerging Market Crises" (with Barry Eichengreen and Ashoka Mody)
in
Stijn Classens & Kristin Forbes (eds.) "International Financial Contagion,"
Kluwer, 2001.
The earlier version of the paper can be still found on the
World Bank site under "Book on Contagion".
“Lessons from Russian 1998 Financial Crisis,”
Center for
Slavic and East European Studies Newsletter, Spring
2001, Vol.18, No.1.
“World Experience in Fighting High Inflation,”
Working papers:
"The
Decision to First Enter the Public Bond Market: The Role of
Firm Reputation, Funding Choices, & Bank Relationships"
Yale ICF WP 04-47 (with Joao Santos)
submitted
This paper uses duration analysis to investigate the timing of firms'
decision to first access the public bond market. We find that, consistent with
Diamond's (1991) model, reputation has a non-monotonic effect on the timing of
firms' first public bond issue: firms with the highest and lowest reputation
enter the public bond market earlier than firms with intermediate reputation. We
also find that, controlling for reputation, issuing a private bond or taking out
a syndicated loan speeds up firms' entry to the public bond market. Among the
firms that issue private bonds, those that select as an underwriter for their
first public bond issue a bank that bought their prior private placements are
able to access the public bond market faster than those which do not capitalize
on these relationships. In contrast, the relationships that firms develop with
banks when they borrow in the syndicated loan market do not affect the timing of
their access to the public bond market. Finally, our results show that entry in
the public bond market is important in that it lowers the cost of raising
external funding subsequently in both the private bond market and the syndicated
loan market.
"Courage to Capital? A Model
of the Effects
of Rating Agencies on Sovereign Debt Roll-over"
CFDP No. 1506 (with Mark Carlson)
submitted
We propose a model of rating agencies
that is an application of global game theory in which heterogeneous investors
act strategically. The model allows us to explore the impact of the introduction
of a rating agency on financial markets. Our model suggests that the addition of
the rating agency affects the probability of default and the magnitude of the
response of capital flows to changes in fundamentals in a non–trivial way, and
that introducing a rating agency can bring multiple equilibria to a market that
otherwise would have the unique equilibrium.
"Bonds or Loans? The Effect of
Macroeconomic Fundamentals"
CFDP No. 1403
revise and resubmit
The costs of financial crises are not invariant to the choice
of debt instrument: bank loans or bonds. The lending boom of the 1990s
witnessed considerable variation over time and across countries in the debt
instrument used by emerging market (EM) borrowers. This paper tests how
macroeconomic fundamentals affect the choice of international debt instrument
available to EM borrowers. A model with asymmetric information is used as a
basis for empirical analysis. Analysis of micro--level data shows that
macroeconomic fundamentals explain a significant share of variation in the ratio
of bonds to loans for private borrowers, but not for the sovereigns.
"Bonds or Loans: On the Choice of International Debt Instrument by Emerging Market borrowers"
This paper analyzes the access of emerging market borrowers to international debt markets and specifically their decision of whether to borrow from banks or on the bond market. This choice is modeled using a framework that focuses on the implications of asymmetric information. In this model, monitoring by banks can attenuate moral hazard. But monitoring has costs, which cause the bank loan market to dry up faster than the bond market as risk and interest rates rise (reflecting the presence of adverse selection). These are the factors that drive the borrower's decision between bank loans or bonds and that determine whether high risk borrowers can access international markets at all. The model predicts that borrowers from countries where economic and political risks are highest will not have market access. More substantively, it predicts that borrowers from countries where economic and political risks are somewhat lower will issue junk bonds, while those from countries where risks are still lower will borrow from banks, and that borrowers from the lowest risk countries will issue high-quality (\investment grade") bonds. A censored regression model with random effects, estimated using simulated maximum likelihood, supports these predictions and reveals the variables that affect the choice of debt instrument at each end of the risk spectrum.
Work in progress
Currency Crises and Foreign Credit to Emerging Markets: Credit Crunch or Demand Effect?
Evidence on the Cost and Benefits of Entering the Public Bond Market (with Joao Santos)
Are private borrowers hurt by sovereign’s debt repudiation?
How do women-economists choose their field: Is there path-dependence?
Effects of political changes on international capital flows (working title, with Ethan Kaplan)
Other papers and publications:
"Russian Foreign Trade: Influence of Ruble Real
Exchange Rate and Regulations" Master's thesis. New Economic School,
Aug. 1996.
"Real Exchange Rate: Meanings, Ways of Measurement" Moscow State University
Young Scholars Conference Proceedings, March 1996 (in Russian).
"Economics for the High School,"
(with a group of
authors). Moscow, Russia, 1998. (textbook and teacher's guide, in
Russian).
"Russian Banking System," (with O.Buklemishev e.a.). Prime-TASS News
Agency Report, Aug. 1996.
"Russian Financial Markets," (ed., with D.Toushounov). Prime-TASS News
Agency Report, Oct. 1995.