Is debt overhang causing firms to underinvest?

Many economists have suggested that the weakness of corporate balance sheets is constraining business spending and investment, and that this in turn is impeding growth and the recovery. High levels of debt can depress spending and investment through several channels. This Commentary explains one of them—debt overhang can cause firms to underinvest—and points to ways in which this effect might be inhibiting the recovery.

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Year of publication:	2010
Authors:	Occhino, Filippo
Published in:	Economic Commentary. - Federal Reserve Bank of Cleveland. - 2010, Jul, 7
Publisher:	Federal Reserve Bank of Cleveland
Subject:	Corporations - Finance \| Debt

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Type of publication:	Article
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008598707