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Corporate debt composition and business cycles

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Bibliographic Details
Authors and Corporations: Živanović, Jelena (Author)
Type of Resource: E-Book
Language: English
published:
[Ottawa] Bank of Canada [2019]
Series: Bank of Canada: Staff working paper ; 2019, 5 (January 2019)
Subjects:
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Notes: Zusammenfassung in französischer Sprache
Description
Summary: Based on empirical evidence, I propose a dynamic stochastic general equilibrium model with two financial sectors to analyze the role of corporate debt composition (bank versus bond financing) in the transmission of economic shocks. It is shown that in the presence of monetary and financial shocks, cyclical changes in corporate debt composition significantly attenuate the effects on investment and output. An additional result of the theoretical model is that a bank-dependent economy is more affected by financial shocks, which is in line with empirical results by Gambetti and Musso (2016), who report stronger real effects of loan supply shocks in Europe (with an excessive reliance on bank debt) than in the US.
Physical Description: 1 Online-Ressource (circa 39 Seiten); Illustrationen
Notes: Zusammenfassung in französischer Sprache