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Net worth ratio and financial instability

Watanabe, Toshio - In: Journal of Economic Structures 2 (2013), pp. 1-18

In order to better understand relationships between the real economy and financial economy, it is necessary to formulate a model of financing. New Keynesian theory emphasizes that a firm's net worth influences investment decisions and business cycles under an imperfect capital market. We have...

Persistent link: https://www.econbiz.de/10011551998

Animal spirits, the stock market, and the unemployment rate: Some evidence for German data

Fritsche, Ulrich; Pierdzioch, Christian - 2016

", stock-market fluctuations should Granger cause fluctuations of the unemployment rate. We performed several Granger … (2015) for U.S. data, we found that the stock market Granger causes unemployment in the short run and the long run when we … control for a deterministic trend in the unemployment rate. Results of a frequency-domain test show that, in the short run …

Persistent link: https://www.econbiz.de/10011564968

Flexible Prices and Leverage

D'Acunto, Francesco; Liu, Ryan; Pflueger, Carolin; … - 2017

The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital...

Persistent link: https://www.econbiz.de/10011615872

Macroeconomic and stock market interactions with endogenous aggregate sentiment dynamics

Flaschel, Peter; Charpe, Matthieu; Galanis, Giorgos; … - 2017

This paper studies the implications of heterogeneous capital gain expectations on output and asset prices. We consider a disequilibrium macroeconomic model where agents' expectations on future capital gains affect aggregate demand. Agents' beliefs take two forms - fundamentalist and chartist -...

Persistent link: https://www.econbiz.de/10011661317

Macroeconomic and stock market interactions with endogenous aggregate sentiment dynamics

Flaschel, Peter; Charpe, Matthieu; Galanis, Giorgos; … - 2017

This paper studies the implications of heterogeneous capital gain expectations on output andasset prices. We consider a disequilibrium macroeconomic model where agents' expectations on future capital gains affect aggregate demand. Agents' beliefs take two forms - fundamentalist and chartist -...

Persistent link: https://www.econbiz.de/10011984254

Inequality, macroeconomic performance and political polarization: An empirical analysis

Proaño Acosta, Christian; Peña, Juan Carlos; … - 2019

-left (populist and radical parties) parties benefit from increasing unemployment rates; c) greater income inequality has increased …

Persistent link: https://www.econbiz.de/10011993218

China's bank balance sheet and financing of heterogeneous enterprises

Huang, Kun; Yao, Qiuge - In: Economies 6 (2018) 4, pp. 1-24

Given the background of financial disintermediation and interest rate marketization, the assets of China's commercial banks can be divided into traditional credit assets, whose rates of return are controlled by the supervision department, and financial assets, whose rates of return fluctuate...

Persistent link: https://www.econbiz.de/10012009860

Fiscal tools at the zero lower bound: A DSGE model with occasionally binding constraints on monetary policy and borrowing

Adolfsen, Jakob Feveile - 2017

The paper analyses the effectiveness of fiscal tools at the zero lower bound (ZLB). A non-linear New Keynesian DSGE model with occasionally binding constraints on monetary policy and borrowing is applied. When the ZLB binds in a liquidity trap, government spending becomes more effective in...

Persistent link: https://www.econbiz.de/10012059471

Monetary policy through production networks: Evidence from the stock market

Ozdagli, Ali; Weber, Michael - 2017

Monetary policy shocks have a large impact on stock prices during narrow time windows centered around press releases by the FOMC. We use spatial autoregressions to decompose the overall effect of monetary policy shocks into a direct effect and a network effect. We attribute 50 to 85 percent of...

Persistent link: https://www.econbiz.de/10012059589

A Contribution to the Theory of Financial Fragility and Crisis

Bhaduri, Amit - 2010

Three interrelated aspects typical of most financial crisis of domestic origin are brought together in a model in this paper. The first aspect is debt financed consumption boom supported by rising asset prices which ultimately leads to credit crunch and debt deflation as lenders lose confidence...

Persistent link: https://www.econbiz.de/10012099894