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dc.titleBond Finance, Bank Credit, and Aggregate Fluctuations in an Open Economy
dc.contributor.authorChang, Roberto
dc.contributor.authorFernandez, Andres
dc.contributor.authorGulan, Adam
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageChile
dc.coverageColombia
dc.coverageMexico
dc.coveragePeru
dc.coverageBrazil
dc.coverageLatin America
dc.date.available2016-08-15T00:00:00
dc.date.issue2016-08-15T00:00:00
dc.description.abstractCorporate 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.
dc.format.extent56
dc.identifier.doihttp://dx.doi.org/10.18235/0011758
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Bond-Finance-Bank-Credit-and-Aggregate-Fluctuations-in-an-Open-Economy.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectFinancial Bond
dc.subjectCredit
dc.subjectCorporate Debt
dc.subjectInterest Rate
dc.subjectCapital Goods
dc.subjectFinancial Friction
dc.subject.jelcodeE32 - Business Fluctuations • Cycles
dc.subject.jelcodeE44 - Financial Markets and the Macroeconomy
dc.subject.jelcodeF41 - Open Economy Macroeconomics
dc.subject.jelcodeG31 - Capital Budgeting • Fixed Investment and Inventory Studies • Capacity
dc.subject.keywordscapital goods;interest rates;bond finance
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-K1089
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