Prof. Anusha Chari of the University of North Carolina on shocks and capital flows in emerging markets
Scientific Sense ®
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Is Forbearance a Mean of Predicting Future Bankruptcy?
In real markets, history is actually quite useful fo predictd inrespective of when financial margaret's now. And so if we're not using available information in making those decisions and become sort of a hand out then that's never going to really work. Many countries around the world have implemented forbearance policies. This has perverse effects of zombe firms getting credit and healthy firms being pushed out. In some sense, its a transfer between good firms and bad firms.
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