We provide analytical and empirical underpinnings for the notion that the financial fragility of the aggregate economy depends on the balance sheet conditions of the corporate sector. First, we obtain time-varying semiparametric estimates of the relationship between the debt-equity ratio and the...

Dynamic stochastic general equilibrium models have begun to dominate the field of macroeconomic theory and policy making. In this paper, I present the first estimation results of investment expenditure for the french economy, applying the bayesian estimation approach of DSGE models. first, I...

Over the last 20 years, the annual average U.S. and Canadian productivity growth rates have been 2.3% and 1.3%, respectively. The objective of this paper is twofold. First, we empirically document the firm size distribution and the productivity for the two countries. Second, we quantitatively...

The purpose of this paper is to study a price level dynamics in a simple four-equation model. A basis of this model is developed from dynamical Kaldorian model which could be noticed very frequently in works of non-linear economic dynamics. Our approach is traditional. The difference is observed...

In this paper we present the first estimation results of total investment expenditure for the Romanian economy, applying the Bayesian estimation approach of DSGE models presented in a number of various papers appeared recently in the open literature. The procedure requires the linear...

This paper shows that liquidity constraints restrict job creation even with flexible labor markets. In a dynamic model of firm investment and demand for labor with imperfect capital markets, represented as a constraint on dividends, and imperfect labor markets, contained in legal firing costs...

We use two stage optimal control techniques to solve some adoption problems. We first consider the case of an isolated economy, which therefore takes its decisions in exclusive accordance with its own preferences and constraints. The planner has to decide whether the economy has to switch to a...

We construct a general equilibrium New-Keynesian model in which firms differ in characteristics such as size, book value, sensitivity to market demand and degree of price stickiness. This establishes an explicit economic relation between firm level characteristics and the relationship between...

This paper analyzes a general-equilibrium model of a heterogeneous agents economy in which the agents are subject to borrowing constraints and uninsurable idiosyncratic production risk. In particular, it addresses the impact of these frictions for aggregate capital accumulation. In contrast to...

This paper studies a general equilibrium economy in which agents have the ability to invest in a risky technology. The investment risk cannot be fully insured with optimal contracts because shocks are private information. We show that the presence of these risks may lead to under-accumulation of...