International Business Cycle and Financial Intermediation
Max Gillman (),
Tamas Csabafi and
Ruthira Naraidoo ()
No 2018_7, CEU Working Papers from Department of Economics, Central European University
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 US relative to the Euro-area, and the US 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 US relative to both Europe and China following a negative bank productivity shock, such as during the 2008 crisis. After 2008, results suggest the Euro-area has been more financially integrated with the US, and China less financially integrated.
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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:ceu:econwp:2018_7
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