Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7242713 | Journal of Economic Behavior & Organization | 2018 | 32 Pages |
Abstract
We design a continuous-time experiment to study how different short-term credit maturities interact with the state of the economy. We find that, when the economy is in a boom, long maturities stabilize the credit market. Yet, when in a downturn, such maturities increase the likelihood of credit freezes. This result has important regulatory implications, as it suggests that a policy aimed at reducing maturity mismatch in short-term credit markets might backfire during a recession.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Ciril Bosch-Rosa,