In the past decades, world capital markets have experienced a large number of sovereign defaults, especially higher frequency in Latin American countries. These economies borrow from the rest of the world more and simultaneously increase the debt-to-GDP ratio so as to result in their sovereign default risk. If investors feared that a country, like Mexico in 1994–1995, would probably be unable to honor its commitments on its bonds coming due. This evidence made investors unwilling to buy new bonds which bear fair market interest rates because of its higher default risk. Unable to sell new bonds on a fair real rate, the government have to pay interest higher for its new financing. This not only raised the cost of new borrowing from abroad, but resulted in difficulties associated with rolling over the debt later on (Frankel and Rose [9]).
On the one hand, if a country accumulates a higher stock of foreign external debt, the risk premium should be raised for higher default risk. Rational investors will expect that the country will result in more capital outflow in the future for their payment, so that the real exchange rate will be expected to depreciate. On the other hand, a more depreciated real exchange rates and a higher stock of external debt liability will be associated with a lower propensity to devalue. An overvalued real exchange rate may temporarily bring some short-term benefits in the form of lower inflation and improved budgetary performance, but the long-run costs will be overwhelming. Faini and Gressani [8] argue that attempts at maintaining an overvalued exchange rate can be very short-lived and costly even in a country where a large stock of external debt liability raises the cost of devaluation.
Channel catfish, Ictalurus punctatus, production is the largest aquaculture industry in North America (Lovell 1992). Arkansas, Alabama, Mississippi and Louisiana are the four largest channel catfish producing states, contributing over 90% of US production (NASS 2004). Commercial production of channel catfish developed in the southern U.S.A. during the late 1950s and early 1960s.
Initially, channel catfish were raised in ponds at low stocking densities and fed low-cost, incomplete diets. As stocking densities increased, development of nutritionally balanced diets became an economic necessity. Commercially produced, complete catfish feeds were based on the nutrient requirements of other animals, such as poultry and salmonids (Wilson and Lovell 1993). In the early 1970s, development of a fish meal shortage emphasized the need to determine the nutrient requirements of channel catfish, which have since been published (Wilson 1991).
Between 2003 and 2006, the composition of the stock of outstanding residential mortgages in the United States changed in several important ways. The fraction of mortgages with variable payments relative to all mortgages increased from 15% to over 25% (see figure 1.) At the same time, the fraction of “subprime” mortgages (mortgages issued to borrowers perceived by lenders to be high-default risks) relative to all mortgages rose from 5% to nearly 15%. Recent work (see e.g. Gerardi et al., forthcoming, figure 3) has shown that many of these subprime loans are characterized by high loan-to-value (LTV) ratios and non-traditional amortization schedules.
