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Essays on the role of banking sector in transmission mechanism and business cycle

Zhang, Hongru 2010. Essays on the role of banking sector in transmission mechanism and business cycle. PhD Thesis, Cardiff University.

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Abstract

The financial friction is shown to depend on the corporate balance sheet condition, bank capital ratio, and liquidity premium. Given the banks' liability composition is constant, the higher the liquidity premium, the larger is the EFP.  Similarly, given the liquidity premium is constant, EFP is larger when higher proportion of loans is produced or financed with bank capital. Based on this framework, we are able to establish the link between the bank capital channel and the model's transmission mechanism subject to exogenous shocks.  Results indicate an active bank capital channel amplifies and propagates the monetary policy shocks (demand shock) while it attenuates and dampens the technology shocks (supply shock) when households' deposit is contracted in nominal term.

Item Type: Thesis (PhD)
Status: Unpublished
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
Funders: Julian Hodge Bank
Date of First Compliant Deposit: 30 March 2016
Last Modified: 22 Jan 2014 14:28
URI: http://orca-mwe.cf.ac.uk/id/eprint/54176

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