Showing 1 - 10 of 249
arena of the afflicted countries, attributing the problems to financial systems where risks originated in excessive credit … with evidence. Of the two, the credit boom explanation stands out as the most plausible predictor of financial crises since … episodes of financial distress compared to direct indicators like credit drawn from the financial system itself …
Persistent link: https://www.econbiz.de/10012460056
We propose a novel mechanism, "financial dampening," whereby loan retrenchment by banks attenuates the effectiveness of monetary policy. The theory unifies an endogenous supply of illiquid local loans and risk-sharing among subsidiaries of bank holding companies (BHCs). We derive an IV-strategy...
Persistent link: https://www.econbiz.de/10012456534
What accounts for inflation after 2008? We use the prominent pre-crisis Smets-Wouters (2007) model to address this question. We find that due to price markup shocks alone inflation would have been 1% higher than observed and 0.5% higher that the long-run average. Their standard deviation is...
Persistent link: https://www.econbiz.de/10012457959
Much of the empirical literature on the natural rate of interest has focused on estimating its path. This paper addresses the question of how exogenous movements in the natural rate of interest affect aggregate activity and inflation in the short and long runs. To this end it proposes a...
Persistent link: https://www.econbiz.de/10013361991
Infrequent but turbulent episodes of outright sovereign default on domestic creditors are considered a "forgotten history" in Macroeconomics. We propose a heterogeneous-agents model in which optimal debt and default on domestic and foreign creditors are driven by distributional incentives and...
Persistent link: https://www.econbiz.de/10012456169
first examine the impact of economic policy uncertainty on aggregate bank credit growth. Then we analyze commercial bank … macroeconomic controls, economic policy uncertainty affected bank level credit growth, and (ii) whether there is variation in the … on bank credit growth. Since this impact varies meaningfully with some bank characteristics - particularly the overall …
Persistent link: https://www.econbiz.de/10012456652
This study offers a single, consistent model that tracks the velocity of broad money (M2) since 1929, including the Great Depression, the global financial crisis, and the Great Recession. The model emphasizes the roles of changes in uncertainty and risk premia, financial innovation, and major...
Persistent link: https://www.econbiz.de/10012456574
Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This … paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of …
Persistent link: https://www.econbiz.de/10012457895
This paper unveils a new resource for macroeconomic research: a long-run dataset covering disaggregated bank credit for …
Persistent link: https://www.econbiz.de/10012458166
to profitable firms in a crisis. Using detailed credit register information for Italian banks before and after the Lehman …
Persistent link: https://www.econbiz.de/10012459195