The ‘Original Sin’ Problem

Michael Chui and Prasanna Gai

in Private Sector Involvement and International Financial Crises

Published in print January 2005 | ISBN: 9780199267750
Published online July 2005 | e-ISBN: 9780191602504 | DOI:
The ‘Original Sin’ Problem

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Explores the reasons why emerging market economies have been unable to borrow internationally in their own currency, the so-called ‘original sin’ problem. It focuses on the role played by central bank reputation and credibility in influencing the choice of currency composition and applies insights from the new literature on the theory of reputation to shed light on the question.

Keywords: central bank credibility; models of reputation; original sin problem

Chapter.  5841 words.  Illustrated.

Subjects: Financial Markets

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