This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Financial Structure and Macroeconomic Volatility: Theory and Evidence Author info | Abstract | Publisher info | Download info | Related research | Statistics Huizinga, Harry
Zhu, Dantao
Additional information is available for the following
registered author(s):
This paper presents a simple model capturing differences between debt and equity finance to examine how financial structure matters for macroeconomic volatility. Debt finance is relatively cheap in the sense that debt holders need to verify relatively few profitability states, but debt finance may lead to costly bankruptcy. At the aggregate level, a more debt-based financial structure leads to a higher bankruptcy rate. Therefore, aggregate output is more variable in case of a heavy reliance on debt finance. This paper provides empirical evidence that countries with more equity finance have a lower variance of GDP and a lower probability of episodes of negative economic growth.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5697.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length:
Date of creation: Jun 2006Date of revision:
Handle: RePEc:cpr:ceprdp:5697Contact details of provider: Postal: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG Phone: 44 - 20 - 7183 8801 Fax: 44 - 20 - 7183 8820
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: ().
Keywords: bankruptcy costs ; financial structure ; macroeconomic volatility ; Other versions of this item:
Find related papers by JEL classification: C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Suarez, Javier & Sussman, Oren, 1997.
"Endogenous Cycles in a Stiglitz-Weiss Economy ,"
CEPR Discussion Papers
1604, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Suarez,J. & Sussman,O., 1995.
"Endogenous Cycles in a Stiglitz-Weiss Economy ,"
Papers
9518, Centro de Estudios Monetarios Y Financieros-.
Suarez, Javier & Sussman, Oren, 1997.
"Endogenous Cycles in a Stiglitz-Weiss Economy ,"
Journal of Economic Theory ,
Elsevier, vol. 76(1), pages 47-71, September.
[Downloadable!] (restricted) Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 1999.
"A new database on financial development and structure ,"
Policy Research Working Paper Series
2146, The World Bank.
[Downloadable!]
Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996.
"Law and Finance ,"
NBER Working Papers
5661, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Rajan, Raghuram G, 1994.
"Why Bank Credit Policies Fluctuate: A Theory and Some Evidence ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 109(2), pages 399-441, May.
[Downloadable!] (restricted)
R. Glenn Hubbard, 1998.
"Capital-Market Imperfections and Investment ,"
Journal of Economic Literature ,
American Economic Association, vol. 36(1), pages 193-225, March.
[Downloadable!] (restricted)
Other versions: Denizer, Cevdet & Iyigun, Murat F. & Owen, Ann L., 2000.
"Finance and macroeconomic volatility ,"
Policy Research Working Paper Series
2487, The World Bank.
[Downloadable!]
Other versions: Karras, Georgios & Song, Frank, 1996.
"Sources of business-cycle volatility: An exploratory study on a sample of OECD countries ,"
Journal of Macroeconomics ,
Elsevier, vol. 18(4), pages 621-637.
[Downloadable!] (restricted)
Kashyap, Anil K & Lamont, Owen A & Stein, Jeremy C, 1994.
"Credit Conditions and the Cyclical Behavior of Inventories ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 109(3), pages 565-92, August.
[Downloadable!] (restricted)
Other versions: Ross Levine, 2002.
"Bank-Based or Market-Based Financial Systems: Which is Better? ,"
NBER Working Papers
9138, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Ross Levine, 2002.
"Bank-Based or Market-Based Financial Systems: Which is Better? ,"
William Davidson Institute Working Papers Series
442, William Davidson Institute at the University of Michigan Stephen M. Ross Business School.
[Downloadable!] Levine, Ross, 2002.
"Bank-Based or Market-Based Financial Systems: Which Is Better? ,"
Journal of Financial Intermediation ,
Elsevier, vol. 11(4), pages 398-428, October.
[Downloadable!] (restricted) Bernanke, B. & Gertler, M. & Gilchrist, S., 1998.
"The Financial Accelerator in a Quantitative Business Cycle Framework ,"
Working Papers
98-03, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!]
Other versions:
Ben Bernanke & Mark Gertler & Simon Gilchrist, 1998.
"The Financial Accelerator in a Quantitative Business Cycle Framework ,"
NBER Working Papers
6455, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999.
"The financial accelerator in a quantitative business cycle framework ,"
Handbook of Macroeconomics ,
in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393
Elsevier.
[Downloadable!] (restricted) Stanley Fischer, 1993.
"The Role of Macroeconomic Factors in Growth ,"
NBER Working Papers
4565, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Beck, Thorstein & Lundberg, Mattias & Majnoni, Giovanni, 2001.
"Financial intermediary development and growth volatility : do intermediaries dampen or magnify shocks? ,"
Policy Research Working Paper Series
2707, The World Bank.
[Downloadable!]
Other versions: King, Robert G. & Levine, Ross, 1993.
"Finance and growth : Schumpeter might be right ,"
Policy Research Working Paper Series
1083, The World Bank.
[Downloadable!]
Other versions: Blum, Jurg & Hellwig, Martin, 1995.
"The macroeconomic implications of capital adequacy requirements for banks ,"
European Economic Review ,
Elsevier, vol. 39(3-4), pages 739-749, April.
[Downloadable!] (restricted)
Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003.
"Institutional causes, macroeconomic symptoms: volatility, crises and growth ,"
Journal of Monetary Economics ,
Elsevier, vol. 50(1), pages 49-123, January.
[Downloadable!] (restricted)
Other versions:
Acemoglu, Daron & Johnson, Simon & Robinson, James A & Thaicharoen, Yunyong, 2002.
"Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth ,"
CEPR Discussion Papers
3575, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Daron Acemoglu & Simon Johnson & James Robinson & Yunyong Thaicharoen, 2002.
"Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth ,"
NBER Working Papers
9124, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Ben S. Bernanke & Mark Gertler, 1995.
"Inside the Black Box: The Credit Channel of Monetary Policy Transmission ,"
NBER Working Papers
5146, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Bernanke, Ben & Gertler, Mark, 1995.
"Inside the Black Box: The Credit Channel of Monetary Policy Transmission ,"
Working Papers
95-15, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!] Bernanke, Ben S & Gertler, Mark, 1995.
"Inside the Black Box: The Credit Channel of Monetary Policy Transmission ,"
Journal of Economic Perspectives ,
American Economic Association, vol. 9(4), pages 27-48, Fall.
[Downloadable!] (restricted) Allen, Franklin & Gale, Douglas, 1995.
"A welfare comparison of intermediaries and financial markets in Germany and the US ,"
European Economic Review ,
Elsevier, vol. 39(2), pages 179-209, February.
[Downloadable!] (restricted)
Other versions: Franklin Allen & Douglas Gale, 1999.
"Diversity of Opinion and Financing of New Technologies ,"
Center for Financial Institutions Working Papers
98-30, Wharton School Center for Financial Institutions, University of Pennsylvania.
[Downloadable!]
Other versions:
Allen, Franklin & Gale, Douglas, 1998.
"Diversity of Opinion and Financing of New Technologies ,"
Working Papers
98-29, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!] Allen, Franklin & Gale, Douglas, 1999.
"Diversity of Opinion and Financing of New Technologies ,"
Journal of Financial Intermediation ,
Elsevier, vol. 8(1-2), pages 68-89, January.
[Downloadable!] (restricted) Rajan, Raghuram G & Zingales, Luigi, 2003.
"Banks and Markets: the Changing Character of European Finance ,"
CEPR Discussion Papers
3865, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997.
"Legal Determinants of External Finance ,"
Harvard Institute of Economic Research Working Papers
1788, Harvard - Institute of Economic Research.
Other versions:
RAFAEL LaPORTA & FLORENCIO LOPEZ-de-SILANES & ANDREI SHLEIFER & ROBERT W. VISHNY, .
"Legal Determinants of External Finance," ,"
CRSP working papers
324, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997.
"Legal Determinants of External Finance ,"
NBER Working Papers
5879, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997.
" Legal Determinants of External Finance ,"
Journal of Finance ,
American Finance Association, vol. 52(3), pages 1131-50, July.
[Downloadable!] (restricted) Jesper Lindgaard Christensen & Ina Drejer, 1998.
"Finance and Innovation System or Chaos ,"
DRUID Working Papers
98-24, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
[Downloadable!]
Kang, Jun-Koo & Stulz, Rene M, 2000.
"Do Banking Shocks Affect Borrowing Firm Performance? An Analysis of the Japanese Experience ,"
Journal of Business ,
University of Chicago Press, vol. 73(1), pages 1-23, January.
[Downloadable!] (restricted)
Robert Townsend, 1979.
"Optimal contracts and competitive markets with costly state verification ,"
Staff Report
45, Federal Reserve Bank of Minneapolis.
[Downloadable!]
Other versions: Rajan, Raghuram G & Zingales, Luigi, 1998.
"Financial Dependence and Growth ,"
American Economic Review ,
American Economic Association, vol. 88(3), pages 559-86, June.
[Downloadable!] (restricted)
Other versions: Ferreira da Silva, Gisele, 2002.
"The impact of financial system development on business cycles volatility: cross-country evidence ,"
Journal of Macroeconomics ,
Elsevier, vol. 24(2), pages 233-253, June.
[Downloadable!] (restricted)
Solomon Tadesse, 2001.
"Financial Architecture and Economic Performance: International Evidence ,"
William Davidson Institute Working Papers Series
449, William Davidson Institute at the University of Michigan Stephen M. Ross Business School.
[Downloadable!]
Other versions: Franco Modigliani & Enrico Perotti, 1997.
"Protection of minority interest and the development of security markets ,"
Managerial and Decision Economics ,
John Wiley & Sons, Ltd., vol. 18(7-8), pages 519-528.
Randall Morck & Masao Nakamura, 1999.
"Banks and Corporate Control in Japan ,"
Journal of Finance ,
American Finance Association, vol. 54(1), pages 319-339, 02.
[Downloadable!] (restricted)
Klaus Neusser & Maurice Kugler, 1998.
"Manufacturing Growth And Financial Development: Evidence From Oecd Countries ,"
The Review of Economics and Statistics ,
MIT Press, vol. 80(4), pages 638-646, November.
[Downloadable!] (restricted)
Jose A. Lopez & Mark M. Spiegel, 2002.
"Financial structure and macroeconomic performance over the short and long run ,"
Pacific Basin Working Paper Series
02-05, Federal Reserve Bank of San Francisco.
[Downloadable!]
Full
references
Access and
download statistics Did you know? You can use convenient plug-ins to search directly IDEAS from your browser.
This page was last updated on 2009-11-25.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .