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We show that a model with imperfectly forecastable changes in future productivity and an occasionally binding collateral constraint can match a set of stylized facts about "sudden stop" events. "Good" news about future productivity raises leverage during times of expansion, increasing the...
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and the stock market in the US around FOMC announcements. A restrictive monetary policy shock in the US is identified by … an increase in the interest rate and a drop in stock prices, while a positive information shock is identified when both …
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points contractionary U.S. interest rate shock induces a fall of 0.5 percent in GDP from its trend two quarters before the … shock materializes. Both anticipated and unanticipated changes in the U.S. interest rate cause significant and …
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