01720cas a2200253 a 4500 AALejournalIMF001358 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451858860 1018-5941 BD-DhAAL BD-DhAAL Garcia-Saltos, Roberto. International Debt and the Price of Domestic Assets / Roberto Garcia-Saltos, Leonardo Auernheimer. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the behavior of indebtedness, consumption, and asset prices in a small open economy in which the foreign real interest rate depends not only on an exogenous world interest rate and on indebtedness, but also on the value of the capital stock, viewed as an implicit 'collateral,' and hence on the price of capital. The paper finds that the collateral effect magnifies the intensity of shocks to the economy and the duration of their impact. The collateral effect also generates additional distortions that could lead to overborrowing. The paper discusses the policy responses to these distortions. Mode of access: Internet Auernheimer, Leonardo. IMF Working Papers; Working Paper ; No. 2000/177 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/177/001.2000.issue-177-en.xml IMF e-Library