Financial Innovations and Macroeconomic Volatility

The volatility of US business cycle has declined during the last two decades. During the same period the financial structure of firms has become more volatile. In this paper we develop a model in which financial factors play a key role in generating economic fluctuations. Innovations in financial markets allow for greater financial flexibility and generate a lower volatility of output together with a higher volatile in the financial structure of firms.

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Year of publication:	2006-06
Authors:	Jermann, Urban ; Quadrini, Vincenzo
Institutions:	C.E.P.R. Discussion Papers
Subject:	business cycle \| debt-equity finance \| financing constraints

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 5727
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; G1 - General Financial Markets ; G3 - Corporate Finance and Governance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005791629