prepay debt early and the effectiveness of debt refinancing in reducing interest costs and rollover risk. Put together, our …

risk in which all banks choose inefficiently high leverage to fund correlated assets and market discipline is compromised … ; systemic risk ; bailout ; forbearance ; moral hazard ; capital requirements …

risks either. Yet in line with theory, we find that the economic costs of corporate debt booms rise when inefficient debt …

the bank sector is highly procyclical, the leverage of the nonbank financial sector is acyclical. We propose a theory of a … debt to households and face risk-based capital constraints, which leads to procyclical leverage. Households can also … financialsector assets. The procyclicality of the banking sector is due to its risk-based funding constraints, which give a central …

changes in financial market risk as measured by the innovations in the Chicago Board Options Exchange Volatility Index (VIX …

.S. output and hours. Moreover, like a textbook demand shock, these disturbances drive prices higher in expansions. We reach …

investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the … relative price of investment. The second shock affects the production of installed capital from investment goods or, more … broadly, the transformation of savings into future capital input. We find that this shock is the most important driver of U …