Published in:Riksbank Research Paper Series ; No. 138
Extent:
1 Online-Ressource (13 p)
Language:
English
DOI:
10.2139/ssrn.2780395
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 2015 erstellt
Description:
We show that in a model with equity and debt financing, the specification of the borrowing constraint is crucial to generate empirically plausible responses of macro variables and asset prices to financial shocks. The interaction between financial frictions and labor demand, as in Jermann and Quadrini (2012), is key to the result. A collateral constraint a la Kiyotaki and Moore (1997) augmented with a working capital assumption generates similar results on impact