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Author: Kiminori Matsuyama Publisher: ISBN: Category : Credit Languages : en Pages : 49
Book Description
Credit market imperfections provide the key to understanding many important issues in business cycles, growth and development, and international economics. Recent progress in these areas, however, has left in its wake a bewildering array of individual models with seemingly conflicting results. This paper offers a road map. Using the same single model of credit market imperfections throughout, it brings together a diverse set of results within a unified framework. In so doing, it aims to draw a coherent picture so that one is able to see some close connections between these results, thereby showing how a wide range of aggregate phenomena may be attributed to the common cause. They include, among other things, endogenous investment-specific technical changes, development traps, leapfrogging, persistent recessions, recurring boom-and-bust cycles, reverse international capital flows, the rise and fall of inequality across nations, and the patterns of international trade. The framework is also used to investigate some equilibrium and distributional impacts of improving the efficiency of credit markets. One recurring finding is that the properties of equilibrium often respond non-monotonically to parameter changes, which suggests some cautions for studying aggregate implications of credit market imperfections within a narrow class or a particular family of models.
Author: Kiminori Matsuyama Publisher: ISBN: Category : Credit Languages : en Pages : 49
Book Description
Credit market imperfections provide the key to understanding many important issues in business cycles, growth and development, and international economics. Recent progress in these areas, however, has left in its wake a bewildering array of individual models with seemingly conflicting results. This paper offers a road map. Using the same single model of credit market imperfections throughout, it brings together a diverse set of results within a unified framework. In so doing, it aims to draw a coherent picture so that one is able to see some close connections between these results, thereby showing how a wide range of aggregate phenomena may be attributed to the common cause. They include, among other things, endogenous investment-specific technical changes, development traps, leapfrogging, persistent recessions, recurring boom-and-bust cycles, reverse international capital flows, the rise and fall of inequality across nations, and the patterns of international trade. The framework is also used to investigate some equilibrium and distributional impacts of improving the efficiency of credit markets. One recurring finding is that the properties of equilibrium often respond non-monotonically to parameter changes, which suggests some cautions for studying aggregate implications of credit market imperfections within a narrow class or a particular family of models.
Author: Hüseyin Günay Publisher: ISBN: Category : Languages : en Pages :
Book Description
The credit market imperfections have important consequences for aggregate cycles, especially for developing countries. The research on the relationship between imperfections and output dynamics at the macro level are ample, but the lack of wide coverage micro data sets for developing countries limit the study of aggregate implications of the micro level capital market imperfections. This paper presents micro evidence on the credit market imperfections in Turkey and connects these imperfections to macro movements. First part of the paper documents the aggregate boom-bust cycles in Turkey and shows that non-tradable sector is more volatile over the business cycle than tradable sector. Additionally, this sector based asymmetry is found to be strongly correlated with aggregate credit movements. To establish the connection between the sector based asymmetries and the credit markets further, second part of the paper constructs two micro data sets. Using structural estimation, we find that non-tradable sector is financially more constrained than tradable sector. With non-tradable sector being more constrained, credit movements become an important determinant of boom-bust cycles. Therefore, we can establish that the asymmetry in the financial constraints of the different sectors at the micro level can generate the observed asymmetrical aggregate response of sectors over the business cycle.
Author: Mr.Joshua Aizenman Publisher: International Monetary Fund ISBN: 145193596X Category : Business & Economics Languages : en Pages : 34
Book Description
This paper interprets contagion effects as an increase in the volatility of aggregate shocks impinging on the domestic economy. The implications of this approach are analyzed in a model with two types of credit market imperfections: domestic banks borrow at a premium on world capital markets, and domestic producers (whose demand for credit results from working capital needs) borrow at a premium from domestic banks. Higher volatility of producers’ productivity shocks increases both domestic and foreign financial spreads and the producers’ cost of capital, resulting in lower employment and higher incidence of default. Welfare effects are nonlinearly related to the degree of international financial integration.
Author: Aubhik Khan Publisher: ISBN: Category : Business cycles Languages : en Pages : 46
Book Description
We study the cyclical implications of credit market imperfections in a calibrated dynamic, stochastic general equilibrium model wherein firms face persistent shocks to aggregate and individual productivity. In our model economy, optimal capital reallocation is distorted by two frictions: collateralized borrowing and partial capital irreversibility yielding (S, s) firm-level investment policies. In the presence of persistent heterogeneity in capital, debt and total factor productivity, the effects of a financial shock are amplified and propagated through large and long-lived disruptions to the distribution of capital that, in turn, imply large and persistent reductions in aggregate total factor productivity. We find that an unanticipated tightening in borrowing conditions can, on its own, generate a large recession far more persistent than the financial shock itself. This recession, and the subsequent recovery, is distinguished both quantitatively and qualitatively from that driven by exogenous shocks to total factor productivity.
Author: Stéphane Verani Publisher: ISBN: 9781267020932 Category : Languages : en Pages : 152
Book Description
Recent empirical studies of firms have documented important differences in the behavior of large and small firms, as well as exporting and non-exporting firms. These empirical regularities are widely interpreted as indirect evidence of frictions in financial markets. There is furthermore a growing consensus that financing frictions significantly impact firm dynamics. This dissertation investigates the links between financial market imperfections, firm dynamics, real business cycles fluctuations and international trade.
Author: Daron Acemoglu Publisher: ISBN: 9780226002026 Category : Macroeconomics Languages : en Pages : 0
Book Description
The NBER Macroeconomics Annual provides a forum for important debates in contemporary macroeconomics and major developments in the theory of macroeconomic analysis and policy that include leading economists from a variety of fields. The papers and accompanying discussions in NBER Macroeconomics Annual 2007 address exchange-rate models; implications of credit market frictions; cyclical budgetary policy and economic growth; the impacts of shocks to government spending on consumption, real wages, and employment; dynamic macroeconomic models; and the role of cyclical entry of new firms and products on the nature of business-cycle fluctuations and on the effects of monetary policy.
Author: Kiminori Matsuyama
Author: Kiminori Matsuyama
Author: Hüseyin Günay
Author: François Ortalo-Magné
Author: Mr.Joshua Aizenman
Author: Jonas Daniel Maurice Fisher
Author: Aubhik Khan
Author: Stéphane Verani
Author: Thomas Gall
Author: Gertjan Willem Vlieghe
Author: Daron Acemoglu