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Great Recession in the United Kingdom was more closely associated with a decline in productivity. Motivated by the similar …
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In this paper, we examine the influence of information rigidities concerning the net worth of banks on the real economy over time. In a first part, we show empirically that expectations about the net earnings of banks (as growth of net worth) are truly biased, particularly during the financial...
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slowdowns in total factor productivity (TFP) growth have been measured in many economies. This paper develops a model that can … describe a slow recovery resulting from an adverse financial shock in the presence of an endogenous mechanism of TFP growth …, and examines how monetary policy should react to the financial shock in terms of social welfare. It is shown that in the …
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