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This paper uses matched bank-firm-level data and the 2014 depreciation of the euro to show that exchange rate depreciations lead to increased bank loan supply of large banks with significant net foreign asset exposure. This increase in lending can be explained by a shift in credit towards both...
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expectations regarding GDP growth, inflation, interest rates, and current accounts. Our empirical findings show that fundamentals … relative to the US leads to an expected appreciation of the domestic currency while higher relative inflation expectations lead …
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fundamentals, which is not fully consistent with traditional fundamentals models. We especially highlight the relevance of the PPP …
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, and the exchange rate is priced by uncovered interest parity, the real exchange rate is determined by expected inflation …-squares learning path for the real exchange rate implied by inflation and output gap data exhibits the real depreciation of the 70s …
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European countries - the Czech Republic, Hungary, and Poland - in their bilateral trade with respect to Germany. Our findings …
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