Preprint
Credit crunches from occasionally binding bank borrowing constraints
We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints, and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large shocks cause their borrowing constraints to bind, leading to contractions in credit offered to firms, and requiring the intermediaries to raise further funds by paying the cost to issue equity. This leads to the occasional sharp increases in interest spreads and the counter-cyclical, positively skewed equity issuance that are characteristic of the credit crunches observed in the data.
- Sprache
-
Englisch
- Klassifikation
-
Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Business Fluctuations; Cycles
Money Supply; Credit; Money Multipliers
- Thema
-
Occasionally binding constraints
Credit crunches
Financial crises
Spreads
Dividends
Equity
Banking
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Holden, Tom D.
Levine, Paul
Swarbrick, Jonathan M.
- Ereignis
-
Veröffentlichung
- (wer)
-
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
- (wo)
-
Kiel und Hamburg
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Preprint
Beteiligte
- Holden, Tom D.
- Levine, Paul
- Swarbrick, Jonathan M.
- ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Entstanden
- 2017
Ähnliche Objekte (12)
Computation of solutions to dynamic models with occasionally binding constraints
Existence, uniqueness and computation of solutions to dynamic models with occasionally binding constraints
Women empowerment in Portugal: Realities, constraints, policies, strategies and initiatives
Ontologically Founded Causal Sets: Constraints for a Future Physical Theory of Everything
Credit demand versus supply channels: Experimental- and administrative-based evidence
Credit Risk, Excess Reserves and Monetary Policy: The Deposits Channel
The End of Neoliberalism?
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries
Regional trade integration in the CIS area
The Mining Industry and Corporate Social Responsibility: Evidence from Two Mining Communities in Ghana
The Impact of Patent Applications in the Context of the ESG Model at World Level
Computation of solutions to dynamic models with occasionally binding constraints
Existence, uniqueness and computation of solutions to dynamic models with occasionally binding constraints
Women empowerment in Portugal: Realities, constraints, policies, strategies and initiatives
Ontologically Founded Causal Sets: Constraints for a Future Physical Theory of Everything
Credit demand versus supply channels: Experimental- and administrative-based evidence
Credit Risk, Excess Reserves and Monetary Policy: The Deposits Channel
The End of Neoliberalism?
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries
Regional trade integration in the CIS area
The Mining Industry and Corporate Social Responsibility: Evidence from Two Mining Communities in Ghana
The Impact of Patent Applications in the Context of the ESG Model at World Level
Computation of solutions to dynamic models with occasionally binding constraints
Existence, uniqueness and computation of solutions to dynamic models with occasionally binding constraints
Women empowerment in Portugal: Realities, constraints, policies, strategies and initiatives
Ontologically Founded Causal Sets: Constraints for a Future Physical Theory of Everything
Credit demand versus supply channels: Experimental- and administrative-based evidence
Credit Risk, Excess Reserves and Monetary Policy: The Deposits Channel
The End of Neoliberalism?
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries
Regional trade integration in the CIS area
The Mining Industry and Corporate Social Responsibility: Evidence from Two Mining Communities in Ghana