Indexed debt contracts and the financial accelerator

Charles Carlstrom, Timothy Fuerst and Matthias Paustian
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Matthias Paustian: https://www.federalreserve.gov/econres/matthias-o-paustian.htm

No 1117, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: This paper addresses the positive and normative implications of indexing risky debt to observable aggregate conditions. These issues are pursued within the context of the celebrated financial accelerator model of Bernanke, Gertler and Gilchrist (1999). The principal conclusions are that the optimal degree of indexation is significant, and that the business cycle properties of the model are altered under this level of indexation.

Keywords: Indexation (Economics); Financial markets (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cba, nep-dge and nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1117

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