Debt overhang in a business cycle model

被引：18
|
作者：
Occhino, Filippo [1 ]
Pescatori, Andrea [2 ]
机构：
[1] Fed Reserve Bank Cleveland, Res Dept, Cleveland, OH 44114 USA
[2] Int Monetary Fund, Res Dept, Washington, DC 20431 USA
来源：
EUROPEAN ECONOMIC REVIEW | 2015年 / 73卷
关键词：
Financial frictions; Financial accelerator; Optimal financial contract; Investment wedge; Labor wedge; AGENCY COSTS; LABOR-MARKET; NET WORTH;
D O I：
10.1016/j.euroecorev.2014.11.003
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
We study the macroeconomic implications of the debt overhang distortion on firms' investment and labor decisions. We show that the distortion arises when the levels of investment and labor are non-contractible and chosen after the signing of the debt contract. The financial friction manifests itself as investment and labor wedges that move counter-cyclically, increasing during recessions when the risk of default is high. Their dynamics amplify and propagate the effects of shocks to productivity, government spending, volatility, and funding costs. Both the size and the persistence of these effects are quantitatively important. (C) 2014 Elsevier B.V. All rights reserved.
引用
收藏
页码：58 / 84
页数：27
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