This paper studies the transmission of bank capital shocks to loan supply in Indonesia. A series of theoretically founded dynamic panel data models are estimated and find nonlinear effects of capital on loan growth: the response of weaker banks to changes in their capital positions is larger...

In the presence of adverse macroeconomic shocks, simultaneous capital losses in multiple banks can prompt them to contract their balance sheets. These bank responses generate externalities that propagate in the form of macro-financial feedback loops. This paper develops a credit response and...

Keller (1998) reexamines Coe and Helpman`s (1995) analysis of international R&D spillovers focusing on the weights used to define the foreign R&D capital stock. Keller creates random weights and shows that they give rise to positive estimates of international R&D spillovers, casting doubts on...