liquidity, which strongly amplifies the initial shock and induces credit crunch dynamics sharing key features with the Great … Recession. The paper thus develops a new balance sheet channel of shock transmission that works through the composition of banks …

investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the … relative price of investment. The second shock affects the production of installed capital from investment goods or, more … broadly, the transformation of savings into future capital input. We find that this shock is the most important driver of U …

investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the … relative price of investment. The second shock affects the production of installed capital from investment goods or, more … broadly, the transformation of savings into future capital input. We find that this shock is the most important driver of U …