Business cycles and monetary regimes in emerging economies: A role for a monopolistic banking sector

• 成果类型: Article
• 署名作者: Mandelman, Federico S.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Atlanta
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2009.11.002
• 发表日期: 2010
• 页码: 122-138
• 关键词: small open economy; Countercyclical bank markups; Exchange rate regimes; Bayesian estimation; balance-sheet effect

摘要

This study shows that the presence of imperfect competition in the banking system propagates external shocks and amplifies the business cycle. Strategic limit pricing, aimed at protecting retail niches from potential competitors, generates countercyclical bank markups. Markup increments during recessions directly increase borrowing costs for firms and indirectly damage the financial position of firms' balance-sheets, increasing the risk perception of lenders. I use Bayesian techniques and data from Argentina to show that the inclusion of monopolistic banking improves the fit of the New Keynesian small open economy model. (C) 2009 Elsevier B.V. All rights reserved.