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distribution, which support the aggregate and micro-level implications of our theory. …
Persistent link: https://www.econbiz.de/10008680925
A fall in house prices due to a change in fundamental value redistributes wealth from those long housing (for whom the fundamental value of the house they own exceeds the present discounted value of their planned future consumption of housing services) to those short housing. In a representative...
Persistent link: https://www.econbiz.de/10005777729
macroeconomics is firmly grounded in economic theory. We disagree and explain why. …
Persistent link: https://www.econbiz.de/10005778451
This paper develops a new analysis of the U. S. economy in the 1920s that is illuminated by contrasts with the 1990s, and it also re-examines the causes of the Great Depression. In both the 1920s and the 1990s the acceleration of productivity growth linked to the delayed effects of previously...
Persistent link: https://www.econbiz.de/10005088780
In the U.S. economy over the past twenty five years, house prices exhibit fluctuations considerably larger than house rents and these large fluctuations tend to move together with business cycles. We build a simple theoretical model to characterize these observations by showing the tight...
Persistent link: https://www.econbiz.de/10010887110
We study the cyclical implications of credit market imperfections in a calibrated dynamic, stochastic general equilibrium model wherein firms face persistent shocks to aggregate and individual productivity. In our model economy, optimal capital reallocation is distorted by two frictions:...
Persistent link: https://www.econbiz.de/10009251518
We use a fully-specified neoclassical model augmented with costly external equity as a laboratory to study the relations between stock returns and equity financing decisions. Simulations show that the model can simultaneously and in many cases quantitatively reproduce: procyclical equity issuance;...
Persistent link: https://www.econbiz.de/10005718541
depression, this paper embeds a trade-off theory of capital structure into a real business cycle model with a small, time …
Persistent link: https://www.econbiz.de/10009019670
We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the...
Persistent link: https://www.econbiz.de/10011096582
theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and …
Persistent link: https://www.econbiz.de/10010969312