von Hagen, Jürgen; Zhang, Haiping - In: Journal of Economic Dynamics and Control 32 (2008) 3, pp. 978-999
We address an important business cycle fact, i.e., the amplified and hump-shaped responses of output to productivity shocks, in a dynamic general equilibrium model with financial frictions. Models with financial frictions in the current literature have either the amplification mechanism or the...