?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F15939%2F&rft.title=The+Pecking+Order+of+Segmentation+and+Liquidity-Injection+Policies+in+a+Model+of+Contagious+Crises&rft.creator=Guembel%2C+Alexander&rft.creator=Sussman%2C+Oren&rft.subject=B-+ECONOMIE+ET+FINANCE&rft.description=We+study+a+two-country+setting+in+which+leveraged+investors+generate+fire-sale%0D%0Aexternalities%2C+leading+to+financial+crises+and+contagion.+Governments+can+affect+the%0D%0Aincidence+of+financial+crisis+and+the+degree+of+contagion+by+injecting+public+liquidity%0D%0Aand%2C+additionally%2C+by+segmenting+the+countries'+liquidity+markets.+We+show+that%0D%0Asegmentation+allows+a+country+to+avoid+contagion+and+fend+off+mild+financial+crises%0D%0Acaused+by+a+small+shock+to+its+liquidity+demand%2C+at+the+cost+of+exposing+it+to+more%0D%0Asevere+financial+crises+caused+by+a+large+shock.+We+derive+a+%22pecking+order%22+result%2C+whereby+segmentation+is+a+second-best+measure+that+coordinated+governments+should+use+only+when+tax+capacity+constrains+them+from+injecting+liquidity.+Even+when+segmentation+is+welfare-enhancing%2C+it+should+be+applied+to+public+liquidity+alone%2C+never+restricting+the+free+%0D%0Aow+of+private+liquidity+across+countries.+Uncoordinated+governments+tend+to+use+segmentation+excessively.&rft.publisher=TSE+Working+Paper&rft.date=2014-03&rft.type=Monograph&rft.type=NonPeerReviewed&rft.format=text&rft.language=en&rft.identifier=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F15939%2F1%2Fwp_tse_498.pdf&rft.identifier=++Guembel%2C+Alexander+%3Chttps%3A%2F%2Fwww.idref.fr%2F181808307%3E+and+Sussman%2C+Oren++(2014)+The+Pecking+Order+of+Segmentation+and+Liquidity-Injection+Policies+in+a+Model+of+Contagious+Crises.++TSE+Working+Paper%2C+n.+14-498%2C+Toulouse+++++&rft.relation=http%3A%2F%2Ftse-fr.eu%2Fpub%2F28250&rft.language=en