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We set up a two-country, regional model of trade in financial services. Competitive firms in each country manufacture untraded consumer goods in an uncertain productive environment, borrowing funds from a bank in either the home or the foreign market. Duopolistic banks can choose their levels of...
Persistent link: https://www.econbiz.de/10011554376
We estimate a three-variate VAR using proxies of global financial uncertainty, the global financial cycle, and world … outbreak. We predict the cumulative loss in world output one year after the uncertainty shock due to Covid-19 to be about 14%. …
Persistent link: https://www.econbiz.de/10012213164
the world output loss that materialized during the great recession would have been 13% lower in absence of GFU shocks. We … after GFU shocks, the larger the world output contraction is. …
Persistent link: https://www.econbiz.de/10012431805