We formulate and estimate a structural model of firm investment behavior that specifies the exact channel through which financial frictions bite. The model also allows for the existence of both convex and non-convex costs to adjusting capital. Essentially, we move beyond simply testing and...

How do firm-specific shocks contribute to large economic downturns associated with financial crises? Using a large and representative dataset on Greek firms covering all sectors of the economy over the period 2000-2014, we find that the contribution of firm-specific shocks to the volatility of...

In this paper we explore whether the changing composition of output in response to technology shocks can play a significant role in the propagation of shocks over time. For this purpose we study two multisector RBC models, with two and three sectors. We find that, whereas the two-sector model...