We study housing and debt in a quantitative general equilibrium model. In the cross-section, the model matches the wealth distribution, the age pro?les of homeownership and mortgage debt, and the frequency of housing adjustment. In the time-series, the model matches the procyclicality and...

Investment booms and asset "bubbles" are often the consequence of heavily leveraged borrowing and speculations of persistent growth in asset demand. We show theoretically that dynamic interactions between elastic credit supply (due to leveraged borrowing) and persistent credit demand (due to...

We find that capital renting makes up one fifth of US capital expenditures, and it increases during downturns. Further, we present cross-country evidence that output losses after financial crises are smaller where renting is more prevalent. To understand these findings, we build a general...

This paper develops a DSGE model in which banks use short-term deposits to provide firms with long-term credit. The demand for long-term credit arises because firms borrow in order to finance their capital stock which they only adjust at infrequent intervals. We show within a real business cycle...

Despite the widespread belief that technology shocks are the main source of business fluctuations, recent empirical studies indicate that in the absence of financial frictions, a shock to the marginal efficiency of investment is the main source and is closely related to financial conditions for...

Etter 10 år med kraftig vekst tyder mykje på at aktiviteten i petroleumsnæringa no er i ferd med å flate ut. Det oljeprisdrivne oppsvinget i investeringane på norsk kontinentalsokkel har gitt viktige vekstimpulsar til fastlandsøkonomien, og var ei av hovudårsakene til at norsk økonomi...

This paper investigates the effect of changes in the retention ratio, profit share, interest rate, and natural rate of growth on the rate of capital accumulation and the financial structure of firms by using a Kaleckian growth model with labor supply constraints. We show that if the economy...

The present paper examines the evolution of FDI flows generated and received by ten new member states of the EU (NMS minus Cyprus and Malta, EEC-10) during the period 2000-2011, with the aim to identify their dynamics, composition and performance. Taking into consideration the EEC-10' high...

In the present case study, our main objective is to bring to the forefront the main factors that led to the double-dip recession of the Cypriot economy. We analyze determinants such as "tax haven" status, interlinks with the Greek economy, spillovers originating in the Euro Area as a whole...

We provide a model with sector-specific debt-collateral constraints to analyze how asymmetric financing conditions across sectors affect the aggregate investment, credit and output composition. In our model, investments in the construction sector allow for higher leverage than investments in the...