activity. Most models share the feature that borrowers suffer a contraction in the quantity of credit. However, the evidence … suggests that although bank lending to firms declines during the crisis, bond financing actually increases to make up much of …

, long-term debt helps reduce rollover risks, but its illiquidity raises the costs of financing. With both default risk and …

the price of an asset and hence the overall financing need more than its collateral value. This insight has implications …This paper studies the effect of durability on the financing of durable assets. We show that more durable assets … dominated technologies. More durable assets are more likely to be rented given their larger financing need. Legal enforcement …

frictions. Firms take their production, financing, and contractual decisions so as to maximize their value under rational …