We integrate bank and bond financing into a two-sector neoclassical growth model to examine the stabilization effect of … endogenous bank leverage adjustment. We show that although bank leverage amplifies shocks, the increase of leverage to a decline … in bank equity is an automatic stabilizer in downturns, since it partially offsets the decline of bank lending to …

evidence of a "demand granularity", based on investment growth shocks instead. The role of demand in explaining aggregate …

returns is developed. It is shown that these economies of scale need only be present in one sector of the economy (investment … as well as a procyclical investment share. The model can account for the observed variability of hours worked …

The objective of this paper is to explore the transmission of non-bank capital shocks through banking networks. We … develop a methodology to construct non-bank capital shocks, idiosyncratic shocks, using labor productivity shocks to large … operates through changes in bank loan supply. Our instrumental variable estimates suggest that a 1% increase in the bank loan …