Gertler, Mark; Hubbard, R. Glenn; Kashyap, Anil K. - 2021
We present a simple framework that incorporates a role for "interest rate spreads" in models of investment fluctuations …. Formally, we develop a simple model of investment and financial contracting under asymmetric information that can he used to … generate an Euler equation describing firms' intertemporal decisions about investment. The Euler equation is than estimated …