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Business cycle effects of credit and technology shocks in a DSGE model with firm defaults

Pesaran, M. Hashem; Xu, TengTeng - 2011

This paper proposes a theoretical framework to analyze the impacts of credit and technology shocks on business cycle dynamics, where firms rely on banks and households for capital financing. Firms are identical ex ante but differ ex post due to different realizations of firm specific technology...

Persistent link: https://www.econbiz.de/10009488413

Interest rate hysteresis in macroeconomic investment under uncertainty

Belke, Ansgar; Göcke, Matthias - 2019

The interest rate is generally considered as an important driver of macroeconomic investment. As an innovation, this … paper derives the exact shape of the "hysteretic" impact of changes in the interest rate on macroeconomic investment under … capital stock and, explicitly, of stochastic changes on the interest rate-investment hysteresis. Starting with hysteresis …

Persistent link: https://www.econbiz.de/10012099522

Interest rate bands of inaction and play-hysteresis in domestic investment : evidence for the Euro area

Belke, Ansgar; Frenzel Baudisch, Coletta; Göcke, Matthias - 2019

The interest rate represents an important monetary policy tool to steer investment in order to reach price stability …. Therefore, implications of the exact form and magnitude of the interest rate-investment nexus for the European Central Bank … impact of changes in the interest rate on macroeconomic investment under certainty and under uncertainty to investigate …

Persistent link: https://www.econbiz.de/10012099559

Who bears the welfare costs of monopoly?the case of the credit card industry

Herkenhoff, Kyle; Raveendranathan, Gajendran - 2019

How are the welfare costs from monopoly distributed across U.S. households? We answer this question for the U.S. credit card industry, which is highly concentrated, charges interest rates that are 3.4 to 8.8 percentage points above perfectly competitive pricing, and has repeatedly lost antitrust...

Persistent link: https://www.econbiz.de/10012147023

Household debt and crises of confidence

Hintermaier, Thomas; Koeniger, Winfried - 2015

We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence. The house price feeds back on itself by contributing to a liquidity effect, which operates through the value of housing in a collateral constraint. Over a specific range of debt...

Persistent link: https://www.econbiz.de/10011347156

How bad Is involuntary part-time work?

Borowczyk-Martins, Daniel; Lalé, Etienne - 2016

We use a set of empirical and analytical tools to conduct parallel analyses of involuntary part-time work and unemployment in the U.S. labor market. In the empirical analysis, we document that the similar cyclical behavior of involuntary part-time work and unemployment masks major differences in...

Persistent link: https://www.econbiz.de/10011453429

Short-time work and precautionary savings

Dengler, Thomas; Gehrke, Britta - 2021

In the Covid-19 crisis, most OECD countries use short-time work schemes (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. We build a New Keynesian model with...

Persistent link: https://www.econbiz.de/10012517675

The long-term effects of labor market entry in a recession : evidence from the Asian financial crisis

Choi, Eleanor Jawon; Choi, Jaewoo; Son, Hyelim - 2020

This study investigates the long-term effects of initial labor market conditions by comparing cohorts who graduated from college before, during, and after the 1997-1998 Asian financial crisis in South Korea. We measure the overall welfare effect by examining their labor market activities, family...

Persistent link: https://www.econbiz.de/10012179332

Optimal fiscal devaluation

Langot, François; Patureau, Lise; Sopraseuth, Thepthida - 2012

We study fiscal devaluation in a small-open economy with labor market search frictions. Our analysis shows the key role of both dimensions in shaping the optimal tax scheme. By reducing labor market distortions, the tax reform is welfare-improving. Yet, as it makes imports more expensive, fiscal...

Persistent link: https://www.econbiz.de/10009548862

How does the economic uncertainty affect asset prices under normal and financial distress times?

Balcilar, Mehmet; Ozdemir, Zeynel Abidin; Ozdemir, Huseyin - 2022

By using a nonlinear VAR model, we investigate whether the response of the US stock and housing markets to uncertainty shocks depends on financial conditions. Our model allows us to change the response of the US financial markets to volatility shocks in periods of normal and financial distress....

Persistent link: https://www.econbiz.de/10013198932

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