EconPapers    
Economics at your fingertips  
 

Bond Finance, Bank Credit, and Aggregate Fluctuations in an Open Economy

Roberto Chang (), Andrés Fernández Martin () and Adam Gulan ()

No 7805, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Corporate sectors in emerging markets have noticeably increased their reliance on foreign financing, presumably reflecting low global interest rates. The evidence also shows a rebalancing from bank loans towards bonds. To study these developments, this paper develops a dynamic open economy model where these modes of finance are determined endogenously. The model replicates the stylized facts following a drop in world interest rates; in particular, rebalancing towards bonds occurs because bank credit becomes relatively more expensive, reflecting the scarcity of bank equity. More generally, the model is suitable for studying interactions between modes of finance and the macroeconomy.

Keywords: capital goods; interest rates; bond finance (search for similar items in EconPapers)
Date: 2016-08
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://publications.iadb.org/publications/english ... -an-Open-Economy.pdf (application/pdf)

Related works:
Journal Article: Bond finance, bank credit, and aggregate fluctuations in an open economy (2017) Downloads
Working Paper: Bond finance, bank credit, and aggregate fluctuations in an open economy (2016) Downloads
Working Paper: Bond Finance, Bank Credit, and Aggregate Fluctuations in an Open Economy (2016) Downloads
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:idb:brikps:7805

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().

 
Page updated 2022-09-27
Handle: RePEc:idb:brikps:7805