Casares, Miguel; Deidda, Luca; Galdon-Sanchez, Jose E. - Departamento de Economía - Universidad Pública de Navarra - 2013
We describe a dynamic macroeconomic model that incorporates firm-level borrowing constraints, competitive CES loan production, and rigidities on both setting prices and wages. The external finance premium (interest-rate spread) is countercyclical with technology and financial shocks, and...