We propose firm-specific (idiosyncratic) uncertainty as a key cross-country determinant of the total credit allocated to the private sector. We show that in the presence of informational asymmetry in the credit market, theory suggests that higher uncertainty lowers the ratio of private credit to...

This paper investigates bond market development in Asia by exploring the determinants of firms’ decisions to issue public debt in a range of Asian economies. Using a novel database covering the period 1995 to 2007, we use comparable micro level panel of nine countries - China, Hong Kong,...

Corporate bond issuers in emerging economies in Asia have often had a choice between an onshore market and an offshore one. Since 1998, however, many of these issuers have increasingly turned to the onshore market. This paper investigates systematically what factors have influenced this choice...

We introduce endogenous participation in an economy with labor and financial market frictions. Agents can choose to be workers or entrepreneurs or not to participate in any market. We examine how the transition rates between these three options are affected by productivity shocks (business cycle...

There are some surprising parallels between the 1997-8 Asian crisis and the recent financial crisis that provide lessons for policymakers. This paper provides a theoretical model of an open economy credit channel including currency mismatch and financial fragility where exporting firms have...

Increasing wage inequality between similar workers plays an important role for overall inequality trends in industrialized societies. To analyze this pattern, we incorporate directed labor market search into a dynamic model of international trade with heterogeneous ï¬rms and homogeneous...

This paper presents a two-sector, two-country model showing that in ation in the housing market, a low personal savings rate, and a construction investment boom can contribute to a large current account decit. In the model, demand by a group of households in the domestic country is constrained...

The forecasting performance of a Global VAR model of actual and expected outputs in the G7 economies is compared with that of alternative models to judge the usefulness of modelling cross-country interdependencies and employing survey data. Both effects are found to be important in...

While the public debt has an interior maximum in the Diamond OLG model, due to an inherent nonlinearity [Rankin and Roffia (2003)], this feature also extends to a linear, AK model when it is conjoined with a backward-looking adjustment process for public debt [Braeuninger (2005)]. We show that...

This paper examines whether credit constraints affect Chinese ï¬rms’ absorption of productivity spillovers originating from the activity of foreign-owned ï¬rms. Using ï¬rm-level data for 2001-2005, we ï¬nd evidence of positive spillovers originating from foreign-owned ï¬rms...