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for a debt contract to specify a restriction on investment or to specify a minimum cash flow realization. Consistent with …
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contract to specify a restriction on investment or to specify a minimum cash flow realization. Consistent with this model, we … control over investment and the ex-post cost of financing …
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We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the...
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