Abstract One of the most interesting questions for policymakers which have emerged from the financial crisis deals with the strength of links between the demand and supply sides of the economy. The traditional view that only cyclical policies influence the former, and structural policies the latter has been challenged in two ways: by the observation that long periods of weak demand can lead to rising structural unemployment and a permanently lower capital stock – the hysteresis effects; and by the claim that stronger demand fueled by monetary policy might be able to reverse such effects. However, the Blanchard and Summers type of hysteresis approach should not be taken one-to-one into recommendations for monetary policy. Merely referring to the hard form of “reverse hysteresis” and pressing for bold counter-cyclical monetary (and fiscal) policies to cope with hysteretic unemployment is neither necessary nor sufficient. Instead, subtler forms of hysteresis should be taken into account. They leave some room for monetary policy to maneuver, more complex way. If long-term unemployment is stagnating. Over the whole circle, even a contractionary monetary policy stance can be considered as an option. Taking hysteries as a starting point, the paper discusses policy complementarities of different kinds and ideology-driven politicial unemployment cycles. It also discusses the “two-handed approach” relying both monetary policy and structural reforms. Zusammenfassung Eine der interessantesten Fragen, mit der sich Politiker seit der der Finanzkrise konfrontiert sehen, betrifft die Stärke des Zusammenhangs zwischen der Nachfrage- und der Angebotsseite der Wirtschaft. Die klassische Ansicht, dass nur zyklische Politiken die erstere und ausschließlich Strukturpolitiken die zweite beeinflussen, wurde auf zweifache Weise in Frage gestellt. Erstens führten lange Phasen schwacher Nachfrage zu steigender struktureller Arbeitslosigkeit und einem dauerhaft niedrigeren Kapitalstock – die sogenannten Hysterese-Effekte. Zweitens zeigte sich, dass eine stärkere Nachfrage, beispielsweise durch die Geldpolitik, zu einer Umkehr dieser Effekte beitrug. Der Hysterese-Ansatz nach Blanchard und Summers sollte jedoch nicht wörtlich genommen und eins zu eins in Empfehlungen für die Geldpolitik aufgehen. Lediglich auf die harte Form der “umgekehrten Hysterese” zu verweisen und mutige antizyklische monetäre (und fiskalische) Maßnahmen zur Bewältigung der Hysterese-Arbeitslosigkeit zu fordern, ist weder notwendig noch hinreichend. Stattdessen sollten subtilere Formen der Hysterese berücksichtigt werden. Sie lassen in der Tat Spielraum für die Geldpolitik, aber auf etwas komplexere Weise. Falls die Langzeitarbeitslosigkeit stagniert, wäre sogar ein kontraktiver geldpolitischer Kurs optimal. Ausgehend vom Hysterese-Phänomen werden in diesem Beitrag Politik-Komplementaritäten unterschiedlicher Art sowie ideologiegesteuerte politische Zyklen der Arbeitslosigkeit untersucht. Darüber h
对于政策制定者来说，金融危机中出现的最有趣的问题之一是经济的需求和供给方面之间的联系强度。只有周期性政策影响前者，而结构性政策影响后者的传统观点受到了两方面的挑战:观察到需求长期疲软可能导致结构性失业上升和资本存量永久下降——即滞后效应;并声称由货币政策推动的更强劲的需求可能能够扭转这种影响。然而，布兰查德和萨默斯式的滞后性方法不应被一对一地纳入货币政策建议中。仅仅提及“反向滞后”的硬形式，并迫切要求采取大胆的反周期货币(和财政)政策来应对滞后性失业，既没有必要，也不够。相反，应该考虑更微妙的迟滞形式。它们为货币政策的操作留下了一些空间，以更复杂的方式。如果长期失业率停滞不前。在整个周期中，即使是紧缩的货币政策立场也可以被视为一种选择。本文以歇斯底里为出发点，讨论了不同类型的政策互补性和意识形态驱动的政治失业周期。文章还讨论了依靠货币政策和结构性改革的“双管齐下”方法。在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国，政治家在德国。我想，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说，我是说。Erstens f199910 - 199916 - 199918 - 199918 - 199918 - 199918 - 199918 - 199918。Zweitens zeigte sich, dass eine stärkere Nachfrage, beispielsweise durch die Geldpolitik, zu einer Umkehr dieser Effekte beitrug。《歇斯底里的研究》，布兰查德和萨默斯在《遗传学与遗传学》杂志上发表了论文wörtlich。Lediglich auf die harte Form der " umgekehrten Hysterese " zu verweisen and mutige antizyklische monetäre (und fiskalische) Maßnahmen zur Bewältigung der Hysterese- arbeitslosigkeit zu fordern, ist weder not enddig noch hinichend。stattdesen solttilere Formen der Hysterese(歇斯底里);在《德国政治》一书中，我认为这是一种复杂的政治。fall die Langzeitarbeitslosigkeit stagniert, wäre sugar in kontraktiver geldpolitier Kurs optimal。Ausgehend vom Hysterese-Phänomen werden in diesem Beitrag Politik-Komplementaritäten unterschiedlicher Art sowie ideologegesteuerte politische Zyklen der Arbeitslosigkeit untersucht。darberchinaus的“两手方法”erörtert, der die Geldpolitik and Strukturreformen strategisch kombiniert。JEL分类:E24, E42, E52
{"title":"Unemployment as a Target for Central Banks? The Case of Hysteresis","authors":"A. Belke","doi":"10.3790/CCM.51.4.587","DOIUrl":"https://doi.org/10.3790/CCM.51.4.587","url":null,"abstract":"Abstract\u0000 One of the most interesting questions for policymakers which have emerged from the financial crisis deals with the strength of links between the demand and supply sides of the economy. The traditional view that only cyclical policies influence the former, and structural policies the latter has been challenged in two ways: by the observation that long periods of weak demand can lead to rising structural unemployment and a permanently lower capital stock – the hysteresis effects; and by the claim that stronger demand fueled by monetary policy might be able to reverse such effects.\u0000 However, the Blanchard and Summers type of hysteresis approach should not be taken one-to-one into recommendations for monetary policy. Merely referring to the hard form of “reverse hysteresis” and pressing for bold counter-cyclical monetary (and fiscal) policies to cope with hysteretic unemployment is neither necessary nor sufficient. Instead, subtler forms of hysteresis should be taken into account. They leave some room for monetary policy to maneuver, more complex way. If long-term unemployment is stagnating. Over the whole circle, even a contractionary monetary policy stance can be considered as an option. Taking hysteries as a starting point, the paper discusses policy complementarities of different kinds and ideology-driven politicial unemployment cycles. It also discusses the “two-handed approach” relying both monetary policy and structural reforms.\u0000 Zusammenfassung\u0000 Eine der interessantesten Fragen, mit der sich Politiker seit der der Finanzkrise konfrontiert sehen, betrifft die Stärke des Zusammenhangs zwischen der Nachfrage- und der Angebotsseite der Wirtschaft. Die klassische Ansicht, dass nur zyklische Politiken die erstere und ausschließlich Strukturpolitiken die zweite beeinflussen, wurde auf zweifache Weise in Frage gestellt. Erstens führten lange Phasen schwacher Nachfrage zu steigender struktureller Arbeitslosigkeit und einem dauerhaft niedrigeren Kapitalstock – die sogenannten Hysterese-Effekte. Zweitens zeigte sich, dass eine stärkere Nachfrage, beispielsweise durch die Geldpolitik, zu einer Umkehr dieser Effekte beitrug.\u0000 Der Hysterese-Ansatz nach Blanchard und Summers sollte jedoch nicht wörtlich genommen und eins zu eins in Empfehlungen für die Geldpolitik aufgehen. Lediglich auf die harte Form der “umgekehrten Hysterese” zu verweisen und mutige antizyklische monetäre (und fiskalische) Maßnahmen zur Bewältigung der Hysterese-Arbeitslosigkeit zu fordern, ist weder notwendig noch hinreichend. Stattdessen sollten subtilere Formen der Hysterese berücksichtigt werden. Sie lassen in der Tat Spielraum für die Geldpolitik, aber auf etwas komplexere Weise. Falls die Langzeitarbeitslosigkeit stagniert, wäre sogar ein kontraktiver geldpolitischer Kurs optimal. Ausgehend vom Hysterese-Phänomen werden in diesem Beitrag Politik-Komplementaritäten unterschiedlicher Art sowie ideologiegesteuerte politische Zyklen der Arbeitslosigkeit untersucht. Darüber h","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78389569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The paper analyzes the experience with unconventional measures to cope with the Zero Lower Bound. It argues that forward guidance and quantitative easing are the natural extension of optimal monetary policy within the New Keynesian Framework, facing a Lower Bound. Unconventional policy had significant effects on financial variables and contributed to stabilizing the real economy. Negative rates have been successful in pushing the effective lower bound below zero. But given the risk of damaging side effects on financial stability and on central bank independence, these policy tools are likely to be less powerful and shorter-lived compared to standard tools. In view of the long-term decline of the natural rate of interest, raising the inflation target up to 3–4 percent appears to be the most promising way to relax the constraint imposed by the lower bound, providing a resilient buffer for effective stabilization. Zusammenfassung Die Arbeit untersucht die Auswirkungen unkonventioneller Geldpolitik. Sie zeigt, dass Forward Guidance und Quantitative Lockerung als Anwendung optimaler Geldpolitik im Rahmen Neu-Keynesianischer Modelle angesichts einer effektiven Zinsuntergrenze zu verstehen sind. Unkonventionelle Geldpolitik hat erfolgreich zur Stabilisierung von Finanzmärkten und Realwirtschaft beigetragen. Auch wenn sich die Zinsuntergrenze in gewissem Rahmen unter null senken lässt, ist die Wirkung unkonventioneller Maßnahmen – im Vergleich zu Standard-Instrumenten – jedoch kurzlebiger und weniger schlagkräftig, unter Berücksichtigung der Risiken für Finanzmarktstabilität und Zentralbankunabhängigkeit. Angesichts des nachhaltigen Rückgangs des “natürlichen” Realzinses erscheint eine Abhebung des Inflationsziels auf 2–4 % der geeignetste Weg, um einen robusten Mechanismus effektiver Stabilisierung zu erreichen. JEL Classification: E43, E52, E58
摘要本文分析了应对零利率下界的非常规措施的经验。它认为，前瞻性指导和量化宽松是新凯恩斯主义框架下最优货币政策的自然延伸，面临着一个下限。非常规政策对金融变量的影响显著，有助于稳定实体经济。负利率成功地将有效下限压低至零以下。但考虑到对金融稳定和央行独立性产生破坏性副作用的风险，与标准工具相比，这些政策工具可能没有那么强大，寿命也更短。鉴于自然利率的长期下降，将通胀目标提高到3 - 4%似乎是最有希望的放松下限约束的方法，为有效稳定提供了一个有弹性的缓冲。[2]在政治上，政治上的不确定性是决定性的。在此基础上，通过前瞻性指导和定量锁定，以及在拉赫曼新凯恩斯主义模型中的最优政策模型，分析了经济增长对经济增长的影响。与传统政治不同的是，传统政治是一种稳定的政治。欧什西奇要是死在gewissem Zinsuntergrenze车架”森肯lasst unt null是死Wirkung unkonventioneller马ß,- im Vergleich族Standard-Instrumenten jedoch kurzlebiger和女儿schlagkraftig, unt Berucksichtigung der Risiken毛皮Finanzmarktstabilitat Zentralbankunabhangigkeit。研究结果表明:1 - 4 %的通货膨胀率与通货膨胀率之间存在显著的差异，即稳定机制与通货膨胀率之间存在显著的差异。JEL分类:E43, E52, E58
{"title":"The Limits of a Negative Interest Rate Policy (NIRP)","authors":"G. Illing","doi":"10.3790/CCM.51.4.561","DOIUrl":"https://doi.org/10.3790/CCM.51.4.561","url":null,"abstract":"Abstract\u0000 The paper analyzes the experience with unconventional measures to cope with the Zero Lower Bound. It argues that forward guidance and quantitative easing are the natural extension of optimal monetary policy within the New Keynesian Framework, facing a Lower Bound. Unconventional policy had significant effects on financial variables and contributed to stabilizing the real economy. Negative rates have been successful in pushing the effective lower bound below zero. But given the risk of damaging side effects on financial stability and on central bank independence, these policy tools are likely to be less powerful and shorter-lived compared to standard tools. In view of the long-term decline of the natural rate of interest, raising the inflation target up to 3–4 percent appears to be the most promising way to relax the constraint imposed by the lower bound, providing a resilient buffer for effective stabilization.\u0000 Zusammenfassung\u0000 Die Arbeit untersucht die Auswirkungen unkonventioneller Geldpolitik. Sie zeigt, dass Forward Guidance und Quantitative Lockerung als Anwendung optimaler Geldpolitik im Rahmen Neu-Keynesianischer Modelle angesichts einer effektiven Zinsuntergrenze zu verstehen sind. Unkonventionelle Geldpolitik hat erfolgreich zur Stabilisierung von Finanzmärkten und Realwirtschaft beigetragen. Auch wenn sich die Zinsuntergrenze in gewissem Rahmen unter null senken lässt, ist die Wirkung unkonventioneller Maßnahmen – im Vergleich zu Standard-Instrumenten – jedoch kurzlebiger und weniger schlagkräftig, unter Berücksichtigung der Risiken für Finanzmarktstabilität und Zentralbankunabhängigkeit. Angesichts des nachhaltigen Rückgangs des “natürlichen” Realzinses erscheint eine Abhebung des Inflationsziels auf 2–4 % der geeignetste Weg, um einen robusten Mechanismus effektiver Stabilisierung zu erreichen.\u0000 JEL Classification: E43, E52, E58","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86882820","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article applies the alternative three-factor model introduced by Chen/Novy-Marx/Zhang (2010) to the German stock market for the sample period of 2004 through 2015. We construct two new factors INV (“investment”) and ROA (“return on assets”) for companies listed on the highest segment of the Frankfurt Stock Exchange, and examine whether they can explain various stock market anomalies using linear time series regressions. Our results reveal that the theoretical assumptions of the model are valid for the German stock market. Firms with higher investments generally exhibit lower returns, while more profitable firms exhibit higher returns. However, we find that the alternative three-factor model does not explain capital market anomalies in the German market better than the factors of the traditional Fama/French (1993) three-factor model.
{"title":"The Alternative Three-Factor Model: Evidence from the German Stock Market","authors":"Florian Kiesel, Andreas Lübbering,, D. Schiereck","doi":"10.3790/CCM.51.3.389","DOIUrl":"https://doi.org/10.3790/CCM.51.3.389","url":null,"abstract":"This article applies the alternative three-factor model introduced by Chen/Novy-Marx/Zhang (2010) to the German stock market for the sample period of 2004 through 2015. We construct two new factors INV (“investment”) and ROA (“return on assets”) for companies listed on the highest segment of the Frankfurt Stock Exchange, and examine whether they can explain various stock market anomalies using linear time series regressions. Our results reveal that the theoretical assumptions of the model are valid for the German stock market. Firms with higher investments generally exhibit lower returns, while more profitable firms exhibit higher returns. However, we find that the alternative three-factor model does not explain capital market anomalies in the German market better than the factors of the traditional Fama/French (1993) three-factor model.","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41796615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Adapt to the Outside But Stay True to Your DNA-Report on the 5th International Conference on Credit Risk Analysis and Management","authors":"Simone Westerfeld, Beatrix Wullschleger","doi":"10.3790/CCM.51.3.491","DOIUrl":"https://doi.org/10.3790/CCM.51.3.491","url":null,"abstract":"","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47844933","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Based on German government bond yields, this paper analyses the performance of laddered strategies during a period of low interest rates. Relying on the REX, Germany’s leading bond index, laddered cash flows are created, and maturity structures are systematically changed. A constructed rolling window of annual returns reveals that risk and return significantly increase with the length of maturity. Performance measures, such as return on risk-adjusted capital and the Sharpe ratio, show that long-term bond ladders significantly dominate short-term ladders. However, for upward movements in the average yield level, the dominance is reduced. The results imply that portfolio managers should consider performance characteristics in maturity decisions as well as expectations of changes in the yield level.
{"title":"Performance of Bond Ladder Strategies: Evidence from a Period of Low Interest Rates","authors":"Christoph Schmidhammer","doi":"10.3790/CCM.51.3.421","DOIUrl":"https://doi.org/10.3790/CCM.51.3.421","url":null,"abstract":"Based on German government bond yields, this paper analyses the performance of laddered strategies during a period of low interest rates. Relying on the REX, Germany’s leading bond index, laddered cash flows are created, and maturity structures are systematically changed. A constructed rolling window of annual returns reveals that risk and return significantly increase with the length of maturity. Performance measures, such as return on risk-adjusted capital and the Sharpe ratio, show that long-term bond ladders significantly dominate short-term ladders. However, for upward movements in the average yield level, the dominance is reduced. The results imply that portfolio managers should consider performance characteristics in maturity decisions as well as expectations of changes in the yield level.","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47199047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Valuation at Origination of Legal Prepayment Options Embedded in 15-Year German Mortgage Loans","authors":"Jan Henrik Wosnitza","doi":"10.3790/CCM.51.3.465","DOIUrl":"https://doi.org/10.3790/CCM.51.3.465","url":null,"abstract":"","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48628450","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Credit and Capital Markets – Kredit und Kapital: Volume 51, Issue 3","authors":"","doi":"10.3790/ccm.51.3","DOIUrl":"https://doi.org/10.3790/ccm.51.3","url":null,"abstract":"","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44348108","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Models of inflation usually have monetary policy affecting the economy through either an interest rate channel or a monetary/credit quantity channel but not through both simultaneously. It is argued here that policy is transmitted via two distinct types of agents – those that are and that are not liquidity-constrained. The implication is that both interest rate and monetary channels must be seen as complementary, joint indicators of inflation and must both be incorporated into models of inflation. A formal representation of price level determination and behaviour in this two-agent framework is provided and evaluated econometrically using US data.
{"title":"A Two-Agent Model of Inflation","authors":"F. Browne, D. Cronin","doi":"10.3790/CCM.51.3.367","DOIUrl":"https://doi.org/10.3790/CCM.51.3.367","url":null,"abstract":"Models of inflation usually have monetary policy affecting the economy through either an interest rate channel or a monetary/credit quantity channel but not through both simultaneously. It is argued here that policy is transmitted via two distinct types of agents – those that are and that are not liquidity-constrained. The implication is that both interest rate and monetary channels must be seen as complementary, joint indicators of inflation and must both be incorporated into models of inflation. A formal representation of price level determination and behaviour in this two-agent framework is provided and evaluated econometrically using US data.","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42085267","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We examine the cash-flow sensitivities of firms’ simultaneous choice of investment, liquidity, dividends and net debt respectively equity financing in a large sample of US corporates between 1971 and 2016. We differentiate firms according to their (external) financial constraints and their (internal) needs to hedge against future shortfalls in operating income. Our estimation approach shows that financially constrained firms in our sample save more future funding capacity but invest and pay out less out of free cash flows than unconstrained firms. In the financial crisis 2007–2009, all firms invested less out of cash flow and raised their debt repayments, cash holdings and dividend payments. Constrained firms, however, show particularly strong increases in their cash savings but much smaller debt reductions compared to unconstrained firms – both in the crisis and post-crisis period. Internal hedging needs have different effects than external constraints: They weaken the build-up of future debt ca...
{"title":"Cash-flow Sensitivities of Interdependent Corporate Decisions – The Role of Financial Constraints and Hedging Needs","authors":"C. Bannier, C. Schürg","doi":"10.3790/ccm.51.2.259","DOIUrl":"https://doi.org/10.3790/ccm.51.2.259","url":null,"abstract":"Abstract We examine the cash-flow sensitivities of firms’ simultaneous choice of investment, liquidity, dividends and net debt respectively equity financing in a large sample of US corporates between 1971 and 2016. We differentiate firms according to their (external) financial constraints and their (internal) needs to hedge against future shortfalls in operating income. Our estimation approach shows that financially constrained firms in our sample save more future funding capacity but invest and pay out less out of free cash flows than unconstrained firms. In the financial crisis 2007–2009, all firms invested less out of cash flow and raised their debt repayments, cash holdings and dividend payments. Constrained firms, however, show particularly strong increases in their cash savings but much smaller debt reductions compared to unconstrained firms – both in the crisis and post-crisis period. Internal hedging needs have different effects than external constraints: They weaken the build-up of future debt ca...","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44746134","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper sketches the history of the German savings and cooperative banks of the 19th century and that of modern microfinance in developing and transition countries of today and explores the parallels that exist between these two histories. One result is that the German savings and cooperative banks of the 19th century can rightly be regarded as precursors of modern microfinance. Another result, that also contains important practical and policy-relevant implications, is that the success of both the German popular banks of the 19th century and of a number of today’s microfinance institutions is due to a strategic shift undertaken quite early in their respective development: They have both abandoned their initial two-way specialization of offering only one type of financial services – either only loans or only deposit facilities – and of only addressing really poor people and very small businesses and instead adopted the role of genuine financial intermediaries, that offer loans and take clients’ deposits, and broadened the spectrum of clients they aspire to reach, such that they have become truly inclusive financial institutions.
{"title":"Microfinance – Once and Today","authors":"R. Schmidt","doi":"10.3790/CCM.51.2.183","DOIUrl":"https://doi.org/10.3790/CCM.51.2.183","url":null,"abstract":"The paper sketches the history of the German savings and cooperative banks of the 19th century and that of modern microfinance in developing and transition countries of today and explores the parallels that exist between these two histories. One result is that the German savings and cooperative banks of the 19th century can rightly be regarded as precursors of modern microfinance. Another result, that also contains important practical and policy-relevant implications, is that the success of both the German popular banks of the 19th century and of a number of today’s microfinance institutions is due to a strategic shift undertaken quite early in their respective development: They have both abandoned their initial two-way specialization of offering only one type of financial services – either only loans or only deposit facilities – and of only addressing really poor people and very small businesses and instead adopted the role of genuine financial intermediaries, that offer loans and take clients’ deposits, and broadened the spectrum of clients they aspire to reach, such that they have become truly inclusive financial institutions.","PeriodicalId":36966,"journal":{"name":"Credit and Capital Markets","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48627567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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