Federico Sturzenegger

Federico Sturzenegger is President of the Banco Ciudad de Buenos Aires. He is the coauthor, with Jeromin Zettelmeyer, of Debt Defaults and Lessons from a Decade of Crises (MIT Press, 2007).

  • The Natural Resources Trap

    The Natural Resources Trap

    Private Investment without Public Commitment

    William Hogan and Federico Sturzenegger

    Experts discuss the contractual instability resulting from commodity price volatility and its effect on private investment and public involvement.

    Volatility in commodity prices has been accompanied by perpetual renegotiation of contracts between private investors in natural resource production and the governments of states with mineral and energy wealth. When prices skyrocket, governments want a larger share of revenues, sometimes to the point of nationalization or expropriation; when prices fall, larger state participation becomes a burden and the private sector is called back in. Recent and newsworthy changes in the price of oil (which fell from an all-time high of $147 in mid-2008 to $40 by year's end) are notable for their speed and the steepness of their rise and fall, but the up-and-down pattern itself is not unusual. If the unpredictability of commodity prices is so predictable, why do contracts not allow for this with mechanisms that would provide a more stable commercial framework?

    In The Natural Resources Trap, top scholars address this question in terms of both theory and practice. Theoretical contributions range across a number of fields, from contract theory to public finance, and treat topics that include taxation, royalties, and expropriation cycles. Case studies examine experiences in the U.K., Bolivia, Argentina, Venezuela, and other parts of the world.

    Contributors Philippe Aghion, George-Marios Angeletos, Fernando Candia Castillo, Rafael di Tella, Juan Dubra, Eduardo Engel, Ramón Espinasa, Ronald Fischer, Jeffrey Frankel, Nicolás Gadano, Dieter Helm, William Hogan, Robert MacCulloch, Osmel Manzano, Francisco Monaldi, Bijan Mossavar-Rahmani, Erich Muehlegger, Fernando Navajas, Robert Pindyck, Lucía Quesada, Roberto Rigobon, Eduardo S. Schwartz, Federico Sturzenegger, Lawrence Summers, Laurence Tai, Michael Tomz, Anders B. Trolle, Louis T. Wells, Nils Wernerfelt, Mark L. J. Wright, Richard Zeckhauser, Jeromin Zettelmeyer

    • Hardcover $19.75 £15.99
  • Debt Defaults and Lessons from a Decade of Crises

    Debt Defaults and Lessons from a Decade of Crises

    Federico Sturzenegger and Jeromin Zettelmeyer

    Detailed case studies of debt defaults by Russia, Ukraine, Pakistan, Ecuador, Moldova, and Uruguay, framed by a comprehensive discussion of the history, economic theory, legal issues, and policy lessons of sovereign debt crises.

    The debt crises in emerging market countries over the past decade have given rise to renewed debate about crisis prevention and resolution. In Debt Defaults and Lessons from a Decade of Crises, Federico Sturzenegger and Jeromin Zettelmeyer examine the facts, the economic theory, and the policy implications of sovereign debt crises. They present detailed case histories of the default and debt crises in seven emerging market countries between 1998 and 2005: Russia, Ukraine, Pakistan, Ecuador, Argentina, Moldova, and Uruguay. These accounts are framed with a comprehensive overview of the history, economics, and legal issues involved and a discussion from both domestic and international perspectives of the policy lessons that can be derived from these experiences.

    Sturzenegger and Zettelmeyer examine how each crisis developed, what the subsequent restructuring encompassed, and how investors and the defaulting country fared. They discuss the new theoretical thinking on sovereign debt and the ultimate costs entailed, for both debtor countries and private creditors. The policy debate is considered first from the perspective of policymakers in emerging market countries and then in terms of international financial architecture. The authors' surveys of legal and economic issues associated with debt crises, and of the crises themselves, are the most comprehensive to be found in the literature on sovereign debt and default, and their theoretical analysis is detailed and nuanced. The book will be a valuable resource for investors as well as for scholars and policymakers.

    • Hardcover $55.00 £45.00
  • Dollarization

    Dollarization

    Debates and Policy Alternatives

    Eduardo Levy Yeyati and Federico Sturzenegger

    Theoretical and empirical analysis of de jure dollarization.

    With the persistent instability of international financial markets, emerging economies are exploring new ways to reduce exposure to capital flow volatility. Some analysts argue that financially open economies are best served by more flexible regimes, while others argue in favor of extreme exchange rate regimes that have a strong commitment to a fixed parity or dispense with an independent currency. The successful launch of the euro has made more realistic the prospect of replacing a national currency with a strong foreign one. Recent examples include the adoption of the US dollar by Ecuador and El Salvador.

    The introduction of a foreign currency as sole legal tender, termed full (de jure) dollarization, has been the center of much political and academic debate. This book provides a comprehensive analysis of the issues from both theoretical and empirical perspectives. The topics discussed include the role of balance sheet effects, the linkage between currency risk and country risk, the impact of dollarization on trade, financial integration and credibility, the implications of dollarization for the lender of last resort, and the institutional and political economy aspects of dollarization.

    • Hardcover $10.75 £8.99
  • The Political Economy of Reform

    The Political Economy of Reform

    Federico Sturzenegger and Mariano Tommasi

    "At last, a collection of the best articles on the political economy of reform. It is one that I shall use in my classes and assign to my students."

    In this book, Federico Sturzenegger and Mariano Tommasi propose formal models to answer some of the questions raised by the recent reform experience of many Latin American and East European countries. They apply common standards of analytical rigor to the study of economic and political behavior, assuming political agents to be rational and forward-looking, with expectations consistent with the properties of the underlying model. The book is organized around three basic questions: first, why do reforms take place? Second, how are reforms implemented? And third, which candidates are most likely to undertake reform? Although most of the chapters deal with policy issues in developing economies, the findings also apply to areas such as social security and health care reform in industrialized countries.

    • Hardcover $13.75 £10.99

Contributor

  • Global Imbalances and the Lessons of Bretton Woods

    Global Imbalances and the Lessons of Bretton Woods

    Barry Eichengreen

    Why the current Bretton Woods-like international financial system, featuring large current account deficits in the center country, the United States, and massive reserve accumulation by the periphery, is not sustainable.

    In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen takes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. Then, as now, it has been argued, the United States ran balance of payment deficits, provided international reserves to other countries, and acted as export market of last resort for the rest of the world. Then, as now, the story continues, other countries were reluctant to revalue their currencies for fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power of historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the world economy today. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.

    Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System. After identifying these differences, Eichengreen looks in detail at the Gold Pool, the mechanism through which European central banks sought to support the dollar in the 1960s. He shows that the Pool was fragile and short lived, which does not bode well for collective efforts on the part of Asian central banks to restrain reserve diversification and support the dollar today. He studies Japan's exit from its dollar peg in 1971, drawing lessons for China's transition to greater exchange rate flexibility. And he considers the history of reserve currency competition, asking if it has lessons for whether the dollar is destined to lose its standing as preeminent international currency to the euro or even the Chinese renminbi.

    • Hardcover $6.75 £5.99
    • Paperback $20.00 £15.99
  • Lectures on Antitrust Economics

    Lectures on Antitrust Economics

    Michael D. Whinston

    Antitrust law regulates economic activity but differs in its operation from what is traditionally considered "regulation." Where regulation is often industry-specific and involves the direct setting of prices, product characteristics, or entry, antitrust law focuses more broadly on maintaining certain basic rules of competition. In these lectures Michael Whinston offers an accessible and lucid account of the economics behind antitrust law, looking at some of the most recent developments in antitrust economics and highlighting areas that require further research. He focuses on three areas: price fixing, in which competitors agree to restrict output or raise price; horizontal mergers, in which competitors agree to merge their operations; and exclusionary vertical contracts, in which a competitor seeks to exclude a rival.

    Antitrust commentators widely regard the prohibition on price fixing as the most settled and economically sound area of antitrust. Whinston's discussion seeks to unsettle this view, suggesting that some fundamental issues in this area are, in fact, not well understood. In his discussion of horizontal mergers, Whinston describes the substantial advances in recent theoretical and empirical work and suggests fruitful directions for further research. The complex area of exclusionary vertical contracts is perhaps the most controversial in antitrust. The influential "Chicago School" cast doubt on arguments that vertical contracts could be profitably used to exclude rivals. Recent theoretical work, to which Whinston has made important contributions, instead shows that such contracts can be profitable tools for exclusion. Whinston's discussion sheds light on the controversy in this area and the nature of those recent theoretical contributions.

    Sponsored by the Universidad Torcuato Di Tella

    • Hardcover $30.00 £25.00
    • Paperback $25.00 £20.00
  • Generational Policy

    Generational Policy

    Laurence J. Kotlikoff

    How generational policy affects the sustainability of a government's fiscal policy.

    In these eight 2002 Cairoli Lectures, presented at the Universidad Torcuato di Tella in Buenos Aires, Argentina, Laurence Kotlikoff shows how generational policy works, how it is measured, and how much it matters. Kotlikoff discusses the incidence and measurement of generational policy, the relationship of generational policy to monetary policy, and the vacuity of deficits, taxes, and transfer payments as economic measures of fiscal policy. Kotlikoff also illustrates generational policy's general equilibrium effects with a dynamic life-cycle simulation model and reviews the empirical evidence testing intergenerational altruism and risk sharing. The lectures were delivered as Argentina faced a devastating depression triggered, in large part, by unsustainable generational policy. Throughout the book, Kotlikoff connects his messages about generational policy to the Argentine situation and the Argentine government's policy mistakes.

    • Hardcover $6.75 £5.99