Financial exposure and the international transmission of financial shocks

Gunes Kamber and Christoph Thoenissen

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper analyzes the transmission mechanism of banking sector shocks in an international real business cycle model with heterogeneous bank sizes. We examine to what extent the financial exposure of the banking sector affects the transmission of foreign banking sector shocks. In our model, the more exposed domestic banks are to the foreign economy via lending to foreign firms, the greater are the spillovers from foreign financial shocks to the home economy. The model highlights the role of openness to trade and the dynamics of the terms of trade in the international transmission mechanism of banking sector shocks Spillovers from foreign banking sector shocks are greater the more open the home economy is to trade and the less the terms of trade respond to foreign shocks.

Pages: 56 pages
Date: 2013-06
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dge and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://cama.crawford.anu.edu.au/sites/default/fil ... amber_thoenissen.pdf (application/pdf)

Related works:
Journal Article: Financial Exposure and the International Transmission of Financial Shocks (2013)
Journal Article: Financial Exposure and the International Transmission of Financial Shocks (2013)
Working Paper: Financial exposure and the international transmission of financial shocks (2013)
Working Paper: Financial intermediation and the internationalbusiness cycle: The case of small countries with big banks (2011)
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:een:camaaa:2013-39

Access Statistics for this paper

More papers in CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University Contact information at EDIRC.
Bibliographic data for series maintained by Cama Admin ().