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  • The Real Effects of Debt Covenants: Evidence from Australia

    From rba.gov.au Story is in PDF Format

    Financial frictions can be important determinants of macroeconomic outcomes. They can lead to sub-optimal credit allocation, create a smaller and less efficient economy (Berk, Stanton and Zechner 2010; Agrawal and Matsa 2013) and amplify macroeconomic shocks (Bernanke, Gertler and Gilchrist 1999; Jeenas 2019). A key cause of financial frictions is informational asymmetries and misalignment in incentives between lenders and borrowers (Stein 2003). This paper studies the macroeconomic consequences of debt covenants, a contractual device designed to address these information frictions in debt financing, using Australia ... (full story)

...Australia’s GDP is expected to grow 3.25 per cent in 2022/23 before slowing to 1.5 per cent growth in 2023/24, according to Treasurer Jim Chalmers who delivers the Albanese government’s first budget.
“The hit to growth will have an effect on employment but jobs will continue to be created,” Mr Chalmers said.


https://www.skynews.com.au/australia...95ce5d29526e71
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  • Posted: Oct 25, 2022 2:29am
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    Category: Fundamental Analysis
    Comments: 1  /  Views: 578

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