An estimated small open economy model of the financial accelerator.: An article from: IMF Staff Papers

This digital document is an article from IMF Staff Papers, published by Thomson Gale on July 1, 2006. The length of the article is 11580 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the author: This paper develops a small open economy model in which entrepreneurs partially finance investment using foreign currency--denominated debt subject to an external finance premium. We use Bayesian estimation techniques to evaluate the importance of balance sheet--related credit market frictions for emerging market countries by incorporating the financial accelerator mechanism. We obtain a sizable value for the external finance premium, which is tightly estimated away from zero. Our results support the inclusion of the financial accelerator in an otherwise standard model that--acting through balance sheets--magnifies the impact of shocks, thereby increasing real and financial volatility. [JEL C11, F41]

Citation Details
Title: An estimated small open economy model of the financial accelerator.
Author: Selim Elekdag
Publication:IMF Staff Papers (Magazine/Journal)
Date: July 1, 2006
Publisher: Thomson Gale
Volume: 53 Issue: 2 Page: 219(23)

Distributed by Thomson Gale