Federal Reserve Bank of Cleveland
Working Papers (Old Series)
Indexed debt contracts and the financial accelerator
This paper addresses the positive and normative implications of indexing risky debt to observable aggregate conditions. These issues are pursued within the context of the celebrated financial accelerator model of Bernanke, Gertler and Gilchrist (1999). The principal conclusions are that the optimal degree of indexation is significant, and that the business cycle properties of the model are altered under this level of indexation.
Cite this item
Charles T. Carlstrom & Timothy S. Fuerst & Matthias Paustian, Indexed debt contracts and the financial accelerator, Federal Reserve Bank of Cleveland, Working Papers (Old Series) 1117, 2011.
Keywords: Indexation (Economics) ; Financial markets
This item with handle RePEc:fip:fedcwp:1117
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