Corporate Balance-Sheet Approach To Currency Crises

Corporate Balance-Sheet Approach To Currency Crises

Paper in proceedings (conference paper)

This paper presents a general equilibrium currency crisis model of the third generation, in which the possibility of currency crises is driven by the interplay between private firms credit-constraints and nominal price rigidities. Despite our emphasis on micro-foundations, the model remains sufficiently simple that the policy analysis can be conducted graphically. The analysis hinges on four main features: i) ex post deviations from purchasing power parity; ii) credit constraints a la Bernanke-Gertler; iii) foreign currency borrowing by domestic firms; iv) a competitive banking sector lending to firms and holding reserves and a monetary policy conducted either through open market operations or short-term lending facilities

This paper presents a general equilibrium currency crisis model of the third generation, in which the possibility of currency crises is driven by the interplay between private firms credit-constraints and nominal price rigidities. Despite our emphasis on micro-foundations, the model remains sufficiently simple that the policy analysis can be conducted graphically. The analysis hinges on four main features: i) ex post deviations from purchasing power parity; ii) credit constraints a la Bernanke-Gertler; iii) foreign currency borrowing by domestic firms; iv) a competitive banking sector lending to firms and holding reserves and a monetary policy conducted either through open market operations or short-term lending facilities

Crisis – Business – Loan – central bank

Crisis – Business – Loan – central bank

VOLKÁNOVÁ, Z.

2014

19.02.2013

Univerzita HK

Hradec Králové

978-80-7435-172-3

Sborník

19.2.2013

20.2:2013

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