WorldCat Identities

Ordoñez, Guillermo L. (Guillermo Luis) 1975-

Works: 35 works in 105 publications in 2 languages and 615 library holdings
Roles: Author
Publication Timeline
Most widely held works about Guillermo L Ordoñez
Most widely held works by Guillermo L Ordoñez
Collateral crises by Gary Gorton( )

10 editions published between 2011 and 2012 in English and held by 73 WorldCat member libraries worldwide

"How can a small shock sometimes cause a large crisis when it does not at other times? Financial fragility builds up over time because it is not optimal to always produce costly information about counterparties. Short-term, collateralized, debt (e.g., demand deposits, money market instruments) -private money- is efficient if agents are willing to lend without producing costly information about the value of the collateral backing the debt. But, when the economy relies on this informationally-insensitive debt, information is not renewed over time, generating a credit boom during which firms with low quality collateral start borrowing. During the credit boom output and consumption go up, but there is increased fragility. A small shock can trigger a large change in the information environment; agents suddenly produce information about all collateral and find that much of the collateral is low quality, leading to a decline in output and consumption. A social planner would produce more information than private agents, but would not always want to eliminate fragility."--1st preliminary page
Optimal regulation in the presence of reputation concerns by Andrew Atkeson( )

9 editions published between 2012 and 2014 in English and held by 63 WorldCat member libraries worldwide

We study a market with free entry and exit of firms who can produce high-quality output by making a costly but efficient initial unobservable investment. If no learning about this investment occurs, an extreme "lemons problem" develops, no firm invests, and the market shuts down. Learning introduces reputation incentives such that a fraction of entrants do invest. If the market operates with spot prices, simple regulation can enhance the role of reputation to induce investment, thus mitigating the "lemons problem" and improving welfare
Uncertainty as commitment by Jaromir B Nosal( )

6 editions published in 2013 in English and held by 56 WorldCat member libraries worldwide

Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate endogenous crises when the government cannot commit. However, at the outbreak of financial problems, usually the government is uncertain about their nature, and hence it may delay intervention to learn more about them. We show that intervention delay leads to strategic restraint banks endogenously restrict the riskiness of their portfolio relative to their peers in order to avoid being the worst performers and bearing the cost of such delay. These novel forces help to avoid endogenous crises even when the government cannot commit. We analyze the effect of government policies from the perspective of this new result
The asymmetric effects of financial frictions by Guillermo L Ordoñez( )

4 editions published in 2012 in English and held by 54 WorldCat member libraries worldwide

Economic variables are known to move asymmetrically over the business cycle: quickly and sharply during crises, but slowly and gradually during recoveries. Not known is the fact that this asymmetry is stronger in countries with less-developed financial systems. This new fact is documented using cross-country data on loan interest rates, investment, and output. The fact is then explained using a learning model with endogenous flows of information about economic conditions. Asymmetry is shown to be stronger in less-developed countries because these countries have greater financial frictions, which are captured in the model by higher monitoring and bankruptcy costs. These greater frictions magnify the crisis reactions of lending rates and economic activity to shocks and then delay their recovery by restricting the generation of information after the crisis. Empirical evidence and a quantitative exploration of the model show that this explanation is consistent with the data
The supply and demand for safe assets by Gary Gorton( )

4 editions published in 2013 in English and held by 52 WorldCat member libraries worldwide

There is a demand for safe assets, either government bonds or private substitutes, for use as collateral. Government bonds are safe assets, given the government's power to tax, but their supply is driven by fiscal considerations, and does not necessarily meet the private demand for safe assets. Unlike the government, the private sector cannot produce riskless collateral. When the private sector reaches its limit (the quality of private collateral), government bonds are net wealth, up to the government's own limits (taxation capacity). The economy is fragile to the extent that privately-produced safe assets are relied upon. In a crisis, government bonds can replace private assets that do not sustain borrowing anymore, raising welfare
Sustainable shadow banking by Guillermo L Ordoñez( )

4 editions published in 2013 in English and held by 50 WorldCat member libraries worldwide

Commercial banks are subject to regulation that restricts their investments. When banks are concerned for their reputation, however, they could self-regulate and invest more efficiently. Hence, a shadow banking that arises to avoid regulation has the potential to improve welfare. Still, reputation concerns depend on future economic prospects and may suddenly disappear, generating a collapse of shadow banking and a return to traditional banking, with a decline in welfare. I discuss how a combination of traditional regulation and cross reputation subsidization may enhance shadow banking and make it more sustainable
Political booms, financial crises by Helios Herrera( )

6 editions published in 2014 in English and held by 41 WorldCat member libraries worldwide

We show that political booms, measured by the rise in governments' popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging economies are more concerned about their reputation and tend to ride the short-term popularity benefits of weak credit booms rather than implementing politically costly corrective policies that would help prevent potential crises. We provide evidence of the relevance of this reputation mechanism
Good booms, bad booms by Gary Gorton( )

4 editions published in 2016 in English and held by 38 WorldCat member libraries worldwide

Credit booms are not rare and usually precede financial crises. However, some end in a crisis (bad booms) while others do not (good booms). We document that credit booms start with an increase in productivity, which subsequently falls much faster during bad booms. We develop a model in which crises happen when credit markets change to an information regime with careful examination of collateral. As this examination is more valuable when collateral backs projects with low productivity, crises become more likely during booms that display large productivity declines. As productivity decays over a boom as an endogenous result of more economic activity, a crisis may be the result of an exhausted boom and not necessarily of a negative productivity shock. We test the main predictions of the model and identify the component of productivity behind crises
Banks as secret keepers by Tri Vi Dang( )

3 editions published in 2014 in English and held by 38 WorldCat member libraries worldwide

Banks are optimally opaque institutions. They produce debt for use as a transaction medium (bank money), which requires that information about the backing assets -- loans -- not be revealed, so that bank money does not fluctuate in value, reducing the efficiency of trade. This need for opacity conflicts with the production of information about investment projects, needed for allocative efficiency. Intermediaries exist to hide such information, so banks select portfolios of information-insensitive assets. For the economy as a whole, firms endogenously separate into bank finance and capital market/stock market finance depending on the cost of producing information about their projects
Debt crises : for whom the bell tolls by Harold Linh Cole( )

4 editions published in 2016 in English and held by 34 WorldCat member libraries worldwide

What a country has done in the past, and what other countries are doing in the present, can feedback for good or for ill in debt markets. We develop a simple model of sovereign bond markets with global investors and endogenous information acquisition about fundamental default probabilities. This model displays hysteresis and contagion in sovereign bond spreads. Small fundamental shocks in one country can induce investors to acquire information, generating price volatility and increased risk premia. These changes may also induce investors to rebalance their portfolio, generating market segmentation and information acquisition in seemingly unrelated economies. Information regimes may persist over time, requiring large improvements in fundamentals to return to more stable bond spread conditions
Fighting crises by Gary Gorton( )

5 editions published in 2016 in English and held by 31 WorldCat member libraries worldwide

In fighting a financial crisis, opacity (keeping the names of banks borrowing at emergency lending facilities secret) and stigma (the cost of having a bank's name revealed) are desirable to restore confidence. Lending facilities raise the perceived average quality of all banks' assets. Opacity reduces the costs of these facilities, creating an information externality that prevents runs even on banks not participating in lending facilities. Stigma is costly but keeps banks from revealing their participation, making opacity sustainable. The key tool for implementing optimal opacity while fine tuning stigma is the haircut for bonds offered as collateral in lending facilities
A Walrasian theory of sovereign debt auctions with asymmetric information by Harold Linh Cole( )

3 editions published in 2018 in English and held by 16 WorldCat member libraries worldwide

How does investors' information about a country's fundamentals, and the fact that this information may be asymmetrically held, affect a country's financing cost? Motivated by this question, and by the observation that sovereign bonds are usually auctioned in large lots to a large number of potential investors, we develop a novel model of auctions with asymmetric information that relies on price-taking and rational expectations. We first characterize sovereign bond prices for different degrees of asymmetric information under two commonly-used protocols: discriminatory-price auctions and uniform-price auctions. We show that there is trade-off between these protocols if information is sufficiently asymmetric: expected bond yields are higher when pricing is discriminatory, but yield volatility is higher when pricing is uniform. We then study endogenous information acquisition and find that (i) discriminatory auctions may display multiple welfare-ranked informational equilibria, and (ii) investors are less likely to acquire information in uniform auctions
Cuotas de importación y bienestar económico : [el caso de la industria automotriz del Mercosur] by José A Delfino( Book )

4 editions published in 1998 in Spanish and held by 11 WorldCat member libraries worldwide

Reputation from nested activities : the inefficient effects of scapegoating by Guillermo L Ordoñez( Book )

5 editions published in 2009 in English and held by 11 WorldCat member libraries worldwide

Larger crises, slower recoveries : the asymmetric effects of financial frictions by Guillermo L Ordoñez( Book )

4 editions published in 2009 in English and held by 11 WorldCat member libraries worldwide

Fragility of reputation and clustering of risk-taking by Guillermo L Ordoñez( Book )

3 editions published in 2009 in English and held by 10 WorldCat member libraries worldwide

Essays on learning and macroeconomics by Guillermo L Ordoñez( )

2 editions published in 2008 in English and held by 4 WorldCat member libraries worldwide

Essays on the macroeconomics of financial markets by Daniel Neuhann( Book )

2 editions published in 2016 in English and held by 2 WorldCat member libraries worldwide

This dissertation consists of four essays on the macroeconomics of financial markets. Chapter 1 presents a theoretical framework to study the rise of securitization and secondary markets for financial assets. I show that the interplay of banks and the non-bank financial intermediary sector can lead to credit booms that end in financial crises, much like the financial boom and bust observed in the U.S. from 1990 to 2008. In line with empirical evidence, I show that low risk-free interest rates driven by expansionary monetary policy or a large inflow of savings can trigger such booms. I end by proposing regulatory tools to manage the credit cycle
Network formation and its impact on systemic risk by Selman Erol( Book )

2 editions published in 2016 in English and held by 2 WorldCat member libraries worldwide

The dissertation consists of three complementary papers on this topic. The first paper titled "Network Formation and Systemic Risk," joint with Professor Rakesh Vohra. We set out the framework and construct a model of endogenous network formation and systemic risk. We find that fundamentally 'safer' economies with higher probability of getting good shocks generate higher interconnectedness, which leads to higher systemic risk. This provides network foundations for "the volatility paradox" arguing that better fundamentals lead to worse outcomes due to excessive risk taking. Second, the network formed crucially depends on the correlation of shocks to the system. The third result is that the networks formed in the model are utilitarian efficient because the risk of contagion is high. This causes firms to minimize contagion by forming dense but isolated clusters that serve as firebreaks. This finding is suggestive that, the worse the contagion, the more the market takes care of it
Retirement in the shadow (banking) by Guillermo L Ordoñez( Book )

2 editions published in 2018 in English and held by 2 WorldCat member libraries worldwide

The U.S. economy has recently experienced a large increase in life expectancy and in shadow banking activities. We argue that these two phenomena are intimately related. Agents rely on financial intermediaries to insure consumption during their uncertain life spans after retirement. When they expect to live longer, they rely more heavily on financial intermediaries that are riskier but offer better insurance terms -- including shadow banks. We calibrate the model to replicate the level of financial intermediation in 1980, introduce the observed change in life expectancy and show that the demographic transition is critical in accounting for the boom in both shadow banking and credit that preceded the recent U.S. financial crisis. We compare the U.S. experience with a counterfactual without shadow banks and show that they may have contributed around 0.6GDP to output, four times larger than the estimated costs of the crisis
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Alternative Names
Ordoñez, Guillermo.

Ordoñez, Guillermo Luis.

Ordoñez, Guillermo Luis 1975-