Title Capital flows and economic fluctuations : the role of commercial banks in transmitting shocks / prepared by Yong Sarah Zhou

Published Washington, D.C. : International Monetary Fund, IMF Institute, ©2008

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Description 1 online resource (30 pages) : illustrations Series IMF working paper, 2227-8885 ; WP/08/12 IMF working paper ; WP/08/12. Summary This paper uses a general equilibrium model to examine the central role played by commercial banks in intermediating and amplifying the capital flow shocks to the local economy in the 1997 Asia financial crisis. It finds that a sudden stop of capital inflows affects the equilibrium credit supply through two channels: first, the plunge of foreign financing decreases the loanable funds directly; and second the sudden stop drives up the cost of providing banking services, thereby additionally reducing the available bank credit to firms through a "deposit run". Empirical results from a VAR model broadly support the theoretical implications Bibliography Includes bibliographical references (pages 28-30) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Banks and banking -- Asia -- Econometric models Capital movements -- Asia -- Econometric models Equilibrium (Economics) -- Econometric models Financial crises -- Asia -- Econometric models Banks and banking -- Econometric models Capital movements -- Econometric models Equilibrium (Economics) -- Econometric models Financial crises -- Econometric models Asia Form Electronic book Author IMF Institute. International Monetary Fund. ISBN 1283511908 9781283511902 1451913273 9781451913279 9781451868746 145186874X

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