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find that: bond finance dampens the overall response of firm credit to monetary policy shocks in economies with a high … initial share of bond- relative to bank-based finance; this effect weakens, and may even reverse, in economies with a low … share of bond financing; and the dampening effect of a larger bond financing share also attenuates the ultimate impact of …
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Credit spreads rise after a monetary policy tightening, yet spread reactions are heterogeneous across firms. Exploiting information from a panel of corporate bonds matched with balance sheet data for U.S. non-financial firms, we document that firms with high leverage experience a more pronounced...
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We decompose aggregate consumption by modelling both savers and their links to collateral constrained borrowers through a bank which prices credit risk. Savers own both firms and the commercial bank while borrowers require loans from the commercial bank to effect their consumption plans. The...
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