Support for the Taylor principle is considerable but the focus of empirical investigation has been on estimated coefficients at the mean of the interest rate distribution. We offer a new approach that estimates the response of interest rates to inflation and that output gap at various points...

Support for the Taylor principle is considerable but the focus of empirical investigation has been on estimated coefficients at the mean of the interest rate distribution. We offer a new approach that estimates the response of interest rates to inflation and the output gap at various points...

Making accurate forecasts of the future direction of interest rates is a vital element when making economic decisions. The focus on central banks as they make decisions about the future direction of interest rates requires the forecaster to assess the likely outcome of committee decisions based...

Empirical investigation of the external finance premium has been conducted on the margin between internal finance and bank borrowing or equities but little attention has been given to corporate bonds especially for the emerging Asian market. In this paper we hypothesize that balance sheet...

The growth of unsecured household credit relative to income has been marked in recent years and many observers have questioned whether it is sustainable. This paper develops a theory-based empirical model of equilibrium household consumption and credit. The equilibrium relationships are embedded...

Corporate bond issuance has followed an upward trend in the last decade that has tripled the volume of corporate public debt. There is a long literature on reasons why firms choose this option, which has recently explored the influence of a firm’s reputation on the decision to go public. The...

Much of the literature on interest rate pass through assumes banks set retail rates in relation to contemporary market rates. We argue that future rates also matter, and if forecasts of future rates are included, the empirical specifications of many previous studies are misspecified. Including...

Making accurate predictions of corporate credit ratings is a crucial issue to both investors and rating agencies. Recent events have drawn attention to ratings agencies methods. In this paper we investigate the determinants of credit ratings as a function of financial variables; we then consider...

Trade credit is an important source of finance for firms and has been well researched, but the focus has been on financial trade-offs. In this paper, we consider the trade-offs with inventories and develop a simple model that recognizes the incentives a firm faces to offer and receive trade...