Book contents
- Frontmatter
- Contents
- Preface and acknowledgements
- 1 Introduction
- Part I Banks, credit and the macroeconomy: a puzzle
- Part II Interactions between credit and industry: firms' market power and banks' liquidity preference
- Part III ‘Inside-the-firm’ interactions between finance and investments
- Summing up …
- Bibliography
- Index
Summing up …
Published online by Cambridge University Press: 03 February 2010
- Frontmatter
- Contents
- Preface and acknowledgements
- 1 Introduction
- Part I Banks, credit and the macroeconomy: a puzzle
- Part II Interactions between credit and industry: firms' market power and banks' liquidity preference
- Part III ‘Inside-the-firm’ interactions between finance and investments
- Summing up …
- Bibliography
- Index
Summary
This study contains several investigations on a few causal links (partly neglected by the literature) between credit, financial markets and industry. The interactions between industrial firms and financial institutions have been analysed here in several contexts: relevance of securitization for the behaviour of macroeconomic credit aggregates (chapter 3), effects of the market power of industrial firms in the credit market (chapter 4), relevance of liquidity preference of the banking system (chapter 5), relevance of firms' financial structure and transaction costs for the investment decision (chapter 6) and simultaneity of financial and investment decisions for the (microeconomic) firm's investment decision (chapter 7).
The work is related to the debate on ‘credit and the macroeconomy’, and since one of the most characteristic assumptions of the ‘Credit View’ is the intrinsic qualitative difference between securities and bank credit, the phenomenon of ‘securitization’ is likely to carry significant macroeconomic implications for the behaviour (i.e. empirical identification of theoretical functions, stability and predictability) of some of the most important credit aggregates. In particular, it is shown in chapter 3 that a stable supply function for bank credit to industry can be identified and estimated for a securitized financial system, because of the substitutability between bank credit and securities.
- Type
- Chapter
- Information
- Credit, Investments and the MacroeconomyA Few Open Issues, pp. 198 - 201Publisher: Cambridge University PressPrint publication year: 1998