Jin, Yi; Zeng, Zhixiong - In: Pacific Economic Review 14 (2009) 2, pp. 275-293
business cycle. Through a working capital channel, both money and productivity shocks can generate procyclicality of sectoral … activities and positive cross-sector correlations of output, employment and investment. In our model, firms in each sector borrow … capital stock. The shocks affect sectoral employment and investment through their impacts on interest rates and external …