Surges and instability : the maturity shortening channel / Xiang Li, Dan Su
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Discovery
1741105137
URN
urn:nbn:de:gbv:3:2-128539
DOI
ISBN
ISSN
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [24. November 2020]
Umfang
1 Online-Ressource (III, 49 Seiten, A19) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
Capital inflow surges destabilise the economy through a maturity shortening mechanism. Our main findings are threefold. First, surges are not just scaled-up normal flows, as they change the shape of the interest rate term structure. Second, corporate debt maturity shortens substantially during surges, especially for firms with foreign bank relationships. Third, the probability of a crisis following surges with a widened term spread is at least twice that after surges without one. Our work suggests that financial globalisation is not merely an equalisation of interest rate differentials, and debt maturity is key to understanding the consequences of capital inflow bonanzas.
Schriftenreihe
IWH-Diskussionspapiere ; 2020, no. 23 (November 2020) ppn:837399270