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We study the macroeconomic implications of the debt overhang distortion. In our model, the distortion arises because investment is non-contractible—when a firm borrows funds, the debt contract cannot specify or depend on the firm’s future level of investment. After the debt contract is...
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labour and capital below unity. We show that compared to the Cobb-Douglas case, the likelihood of indeterminacy under a …
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A Beckerian model of household production is developed to study the allocation of capital and time between market and … the market, labor interacts with business capital to produce market goods and services, and likewise at home the remaining … time, leisure, is combined with household capital to produce home goods and services. The theoretical model presented is …
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Remarks at the Thirty-Seventh Annual Jackson Hole Symposium, Jackson Hole, Wyoming.
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Remarks at the Thirty-Seventh Annual Jackson Hole Symposium, Jackson Hole, Wyoming.
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