Corporate Finance and Monetary Policy

Randall Wright, Cathy Zhang and Guillaume Rocheteau
Additional contact information
Guillaume Rocheteau: University of California, Irvine

No 97, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: This paper provides a theory of external and internal finance where entrepreneurs finance random investment opportunities with fiat money, bank liabilities, or trade credit. Loans are distributed in an over-the-counter credit market where the terms of the loan contract, including size, rate, and down payment, are negotiated in a decentralized fashion subject to pledgeability constraints. The model has implications for the cross-sectional distribution of corporate loan rates and loan sizes, interest rate pass-through, and the transmission of monetary policy (described either as money growth or open market operations) with or without liquidity requirements.

Date: 2016
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2016/paper_97.pdf (application/pdf)

Related works:
Journal Article: Corporate Finance and Monetary Policy (2018)
Working Paper: Corporate Finance and Monetary Policy (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:97

Access Statistics for this paper

More papers in 2016 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().