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1 – 10 of over 1000This article estimates the loan spread equation taking into account the endogenous matching between banks and firms in the loan market. To overcome the endogeneity problem, I…
Abstract
This article estimates the loan spread equation taking into account the endogenous matching between banks and firms in the loan market. To overcome the endogeneity problem, I supplement the loan spread equation with a two-sided matching model and estimate them jointly. Bayesian inference is feasible using a Gibbs sampling algorithm that performs Markov chain Monte Carlo (MCMC) simulations. I find that medium-sized banks and firms tend to be the most attractive partners, and that liquidity is also a consideration in choosing partners. Furthermore, banks with higher monitoring ability charge higher spreads, and firms that are more leveraged or less liquid are charged higher spreads.
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I show that the equilibrium distribution of matches associated with the empirical transferable utility one-to-one matching (TUM) model introduced by Choo and Siow (2006a, 2006b)…
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I show that the equilibrium distribution of matches associated with the empirical transferable utility one-to-one matching (TUM) model introduced by Choo and Siow (2006a, 2006b) corresponds to the fixed point of system of
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Some economists have argued that assortative mating between men and women has increased over the last several decades. Sociologists have argued that educational homogamy has…
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Some economists have argued that assortative mating between men and women has increased over the last several decades. Sociologists have argued that educational homogamy has increased. The two are conceptually distinct but often confused. We clarify the relation between the two and, using both the Current Population Surveys and the decennial Censuses/American Community Survey, show that neither conclusion is correct. Both are sensitive to how educational categories are chosen. The former is based on the use of inappropriate statistical techniques.
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Malcolm B. Coate and Mark D. Williams
This paper generalizes the critical loss concept of Harris and Simons to account for a broader range of possible cost structures. Our analysis presents a specialized market-level…
Abstract
This paper generalizes the critical loss concept of Harris and Simons to account for a broader range of possible cost structures. Our analysis presents a specialized market-level equilibrium for a relatively homogeneous good in which the Harris and Simons’ critical loss structure is appropriate for market definition. Then, we broaden the equilibrium and propose a generalized critical loss analysis. Of course, for relatively differentiated goods, market definition analysis would use firm-level modeling and therefore the standard market-level critical loss modeling could be inappropriate.