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The Agglomeration of Bankruptcy
Benmelech, Efraim - 2014
. The bankruptcy and liquidation of a retail chain weakens the economies of agglomeration in any given local area, reducing …
Persistent link: https://www.econbiz.de/10013051758
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Advance Notice Provisions in Plant Closing Legislation : Do They Matter?
Ehrenberg, Ronald G.; Jakubson, George H. - 2021
This paper evaluates the cases for and against plant closing legislation. In spite of the growth of legislative efforts in the area, there has been surprisingly little effort devoted to analyzing what the effects are of existing plant closing legislation, of provisions in privately negotiated...
Persistent link: https://www.econbiz.de/10013246388
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Investment Busts, Reputation, and the Temptation to Blend in with the Crowd
Grenadier, Steven R. - 2014
We provide a dynamic model of an industry in which agents strategically time liquidation decisions in an effort to … protect their reputations. As in traditional models, agents delay liquidation attempting to signal their quality. However …, when the industry faces a common shock that indiscriminately forces liquidation of a subset of projects, agents with bad …
Persistent link: https://www.econbiz.de/10013066308
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How Individuals Respond to a Liquidity Shock : Evidence from the 2013 Government Shutdown
Gelman, Michael - 2019
Using comprehensive account records, this paper examines how individuals adjusted spending and saving in response to a temporary drop in liquidity due to the 2013 U.S. government shutdown. The shutdown cut paychecks by 40% for affected employees, which was recovered within 2 weeks. Because the...
Persistent link: https://www.econbiz.de/10012904404
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Exiting from QE
Hayashi, Fumio - 2014
We develop a regime-switching SVAR (structural vector autoregression) in which the monetary policy regime, chosen by the central bank responding to economic conditions, is endogenous and observable. There are two regimes, one of which is QE (quantitative easing). The model can incorporate the...
Persistent link: https://www.econbiz.de/10013057827
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Plant Closings, Labor Demand and the Value of the Firm
Hamermesh, Daniel S. - 2021
This study postulates an internal labor market in which workers accumulate firm-specific human capital that raises the value of the firm and insulates it to some extent from the vagaries of product demand that might result in its closing. Negative product-market shocks reduce wage growth and...
Persistent link: https://www.econbiz.de/10013220010
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Foreign Owners and Plant Survival
Bernard, Andrew B.; Sjoholm, Fredrik - 2021
In recent years, international capital flows of all types have increased dramatically and most governments have been actively encouraging inflows of direct investment. However, concerns remain that reliance on foreign multinationals may be a risky development strategy as foreign firms are likely...
Persistent link: https://www.econbiz.de/10013224697
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Reconciling Hayek'S and Keynes Views of Recessions
Beaudry, Paul; Galizia, Dana; Portier, Franck - 2021
liquidation resulting from past over-investment. According to the main proponents of this view, government spending should not be … used to mitigate such a liquidation process, as doing so would simply result in a needed adjustment being postponed. In … countered by activist fiscal policy. In this paper we reexamine the liquidation perspective of recessions in a setup where …
Persistent link: https://www.econbiz.de/10013224999
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The Cost of Recessions Revisited : a Reverse-Liquidationist View
Caballero, Ricardo J.; Hammour, Mohamad L. - 2021
The observation that liquidations are concentrated in recessions has long been the subject of controversy. One view holds that liquidations are beneficial in that they result in increased restructuring. Another view holds that liquidations are privately inefficient and essentially wasteful. This...
Persistent link: https://www.econbiz.de/10013248401
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Innovation and the Financial Guillotine
Nanda, Ramana - 2015
Our paper demonstrates that while failure tolerance by investors may encourage potential entrepreneurs to innovate, financiers with investment strategies that tolerate early failure endogenously choose to fund less radical innovations. Failure tolerance as an equilibrium price that increases in...
Persistent link: https://www.econbiz.de/10013035138