This paper studies the implications of perceived default risk for aggregate output and productivity. Using a model of credit contracts with moral hazard, we show that a firm's probability of default is a sufficient statistic for capital allocation. The theoretical framework suggests an aggregate...

PART 1 Introduction to Organizational Behavior -- CHAPTER 1 An Overview of Organizational Behavior -- CHAPTER 2 The Changing Environment of Organizations -- PART 2 Individual Processes in Organizations -- CHAPTER 3 Foundations of Individual Behavior -- CHAPTER 4 Motivation in Organizations --...