Lookup NU author(s): Dr Fabrizio Casalin
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).
This paper studies the interrelation among the volumes of bonds andstocks issued by non-financial firms, and levels of industrial loans outstandingin the US. These aggregates are co-integrated and characterized by asymmetricvolatility. Their co-movements are driven by financial indicators suchas the yield spread, size of loan market and market volatility. Bond and stockissuance are positively correlated, and even more so during the expansionaryphase of the cycle. Loans outstanding and bond issuance are negatively correlated,and their substitutability increases in periods of economic downturn,highlighting the importance of bond markets to mitigate credit crunches.
Author(s): Casalin F, Dia E
Publication type: Article
Publication status: Published
Journal: Applied Economics
Online publication date: 26/08/2015
Acceptance date: 28/07/2015
Date deposited: 02/08/2015
ISSN (print): 0003-6846
ISSN (electronic): 1466-4283
Publisher: Taylor & Francis
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