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 …

plays on the world stage. The main thesis of our work is that, despite the triumphant rhetoric praising the merits of …

activity across countries. We show in a two-country setting with borrowing constraints that international credit markets are … subject to self-fulfilling variations in the world real interest rate. Those expectation-driven changes in the borrowing cost … asset prices, GDP, consumption, investment and employment). When firms around the world benefit from unexpectedly low debt …