Economists Eichengreen and Hausmann coined the phrase original ...

[RYAN BANYAN]

Economists Eichengreen and Hausmann coined the phrase original sin to describe developing countries inability to borrow in their own currencies. Where do they believe that this inability comes from? What are other beliefs on this topic?
 
  What will be an ideal response?

Question 2

In the U.S., banks
 
  A) cannot be forced to sell assets that the bank examiner deems too risky.
  B) can be forced to sell assets that the bank examiner deems too risky.
  C) can be forced to sell assets that the bank examiner deems too risky only after a court order.
  D) can be forced to sell assets that the bank examiner deems too risky only after both examiners from the Fed and from the FDIC agree.
  E) can be forced to trade assets that the bank examiner deems too risky.

[mcinincha279]

Answer to Question 1

Eichengreen and Hausmann believe that this inability is a structural problem of poor countries caused by features of the global capital market such as limited additional diversification potential.
For the second part of the question, students discussion may include but is not limited to the following:
(1 ) Bad history of economic policies
(2 ) Problems arise with debt finance in international markets for developing countries

Answer to Question 2

B