Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212360 
Year of Publication: 
2016
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 22/2016
Publisher: 
Bank of Finland, Helsinki
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, we develop 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.
JEL: 
E32
E44
F41
G31
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-120-7
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.