International Business Cycle and Financial Intermediation

Tamas Csabafi, Max Gillman and Ruthira Naraidoo

Journal of Money, Credit and Banking, 2019, vol. 51, issue 8, 2293-2303

Abstract: The paper extends a standard two‐country international real business cycle model to include financial intermediation by banks of loans and government bonds. The paper contributes an explanation for both the United States relative to the Euro‐area, and the United States relative to China, of cross‐country correlations of loan rates, deposit rates, and the loan premia. It shows a type of financial retrenchment for the United States relative to both Europe and China following a negative bank productivity shock, such as during the 2008 crisis. After 2008, results suggest that the Euro‐area has been more financially integrated with the United States, and China less financially integrated.

Date: 2019
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https://doi.org/10.1111/jmcb.12580

Related works:
Working Paper: International Business Cycle and Financial Intermediation (2018)
Working Paper: International Business Cycle and Financial Intermediation (2018)
Working Paper: International Business Cycle and Financial Intermediation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:8:p:2293-2303

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