Corporate Debt Structure and the Financial Crisis

Fiorella De Fiore and Harald Uhlig ()

No 1759, Working Paper Series from European Central Bank

Abstract: We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the cost of market debt rose above the cost of bank loans. We show that the flexibility offered by banks on the terms of their loans and firms JEL Classification: E32, E44, C68, G23

Keywords: corporate debt; financial crisis; firms heterogeneity; risk shocks (search for similar items in EconPapers)
Date: 2015-02
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (81)

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Related works:
Journal Article: Corporate Debt Structure and the Financial Crisis (2015)
Working Paper: Corporate Debt Structure and the Financial Crisis (2014)
Working Paper: Corporate Debt Structure and the Financial Crisis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20151759

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