Financial accelerator theories imply that weak balance sheets can amplify adverse shocks on firm investment. This effect should be asymmetric, stronger in downturns than in upturns and stronger for small firms than for large firms. This paper provides empirical evidence of the presence of a...

The recent rise of excess liquidity in the United States and in the euro zone did not result in a resurgence of inflation. Excess liquidity, rather than heading towards the market of consumer goods, could have moved towards the asset markets. In the data covering the period going from 1980 to...