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Dispersion in Financing Costs and Development / Tiago V. Cavalcanti, Joseph P. Kaboski, Bruno S. Martins, Cezar Santos.
- Format:
- Book
- Author/Creator:
- Cavalcanti, Tiago V.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28635.
- NBER working paper series no. w28635
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- Most aggregate theories of financial frictions model credit available at a single cost of financing but rationed. However, using a comprehensive firm-level credit registry, we document both high levels and high dispersion in credit spreads to Brazilian firms. We develop a quantitative dynamic general equilibrium model in which dispersion in spreads arises from intermediation costs and market power. Calibrating to the Brazilian data, we show that, for equivalent levels of external financing, dispersion has more profound impacts on aggregate development than single-price credit rationing and yields firm dynamics that are more consistent with observed patterns.
- Notes:
- Print version record
- April 2021.
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