Agénor, P.-R.; Alper, K.; Pereira da Silva, L. - In: Journal of Macroeconomics 34 (2012) 3, pp. 687-705
The business cycle effects of bank capital regulatory regimes are examined in a New Keynesian model with credit market imperfections and a cost channel of monetary policy. Bank capital increases incentives for banks to monitor borrowers, thereby raising the repayment probability, and excess...