destruction of jobs in the presence of heterogeneity in firm productivity and frictional credit and labor markets. The aggregate … level of TFP is determined by both the underlying distribution of firm productivity and the structures of the credit and … labor markets. Adverse shocks to credit markets destroy the least productive jobs and slow job creation, thus raising …

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit … with no credit market imperfections. The effects are exacerbated by a steepening of the term structure of interest rates …

the corporate bond market (the "credit spread puzzle"). This paper introduces a parsimonious real business cycle model … disaster. This simple feature generates large, volatile and countercyclical credit spreads as well as novel business cycle …

This paper uncovers a novel mechanism by which bubbles crowd in capital investment. If capital is initially depressed … by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium … channel is a robust phenomenon that occurs along the entire time path after bubbles are injected. …

. We incorporate a rational bubble process in the (relative) price of capital. Our results show that bubbles account for a …

This paper uncovers a novel mechanism by which bubbles crowd in capital investment. If capital is initially depressed … by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium … channel is a robust phenomenon that occurs along the entire time path after bubbles are injected. …

How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble … initially raises housing credit demand and crowds out credit to non-housing firms. If the bubble lasts, however, housing credit … repayments raise banks' net worth and expand credit supply, so that crowding-out eventually gives way to crowding-in. This is …