This paper develops a small open economy model in which entrepreneurs partially finance investment using foreign currency-denominated debt subject to an external finance premium. We use Bayesian estimation techniques to evaluate the importance of balance sheet-related credit market frictions for...

This paper develops a small open economy model in which entrepreneurs partially finance investment using foreign currency-denominated debt subject to an external finance premium. We use Bayesian estimation techniques to evaluate the importance of balance sheet-related credit market frictions for...

This paper develops a five-region version—Canada, a group of oil-exporting countries, the United States, emerging Asia, and Japan plus the euro area—of the global economy model encompassing production and trade of crude oil. In the presence of real adjustment costs that reduce the short- and...