Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146498
Authors: 
Chang, Roberto
Fernández Martin, Andrés
Gulan, Adam
Year of Publication: 
2016
Series/Report no.: 
IDB Working Paper Series IDB-WP-720
Abstract: 
Corporate sectors in emerging markets have noticeably increased their reliance on foreign financing, presumably reflecting low global interest rates. The evidence also shows a rebalancing from bank loans towards bonds. To study these developments, this paper develops a dynamic open economy model where these modes of finance are determined endogenously. The model replicates the stylized facts following a drop in world interest rates; in particular, rebalancing towards bonds occurs because bank credit becomes relatively more expensive, reflecting the scarcity of bank equity. More generally, the model is suitable for studying interactions between modes of finance and the macroeconomy
Subjects: 
Emerging markets
Corporate debt
Bonds
Bank credit
JEL: 
E32
E44
F41
G31
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode
Document Type: 
Working Paper

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