Show simple item record

dc.contributor.authorPesaran, M. Hashem
dc.contributor.authorXu, TengTeng
dc.date.accessioned2012-04-06T04:21:13Z
dc.date.available2012-04-06T04:21:13Z
dc.date.issued2011-10-05
dc.identifier.otherCWPE1159
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/242032
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/242032
dc.description.abstractThis paper proposes a theoretical framework to analyze the impacts of credit and technology shocks on business cycle dynamics, where firms rely on banks and households for capital financing. Firms are identical ex ante but differ ex post due to different realizations of firm specific technology shocks, possibly leading to default by some firms. The paper advances a new modelling approach for the analysis of financial intermediation and firm defaults that takes account of the financial implications of such defaults for both households and banks. Results from a calibrated version of the model highlights the role of financial institutions in the transmission of credit and technology shocks to the real economy. A positive credit shock, defined as a rise in the loan to deposit ratio, increases output, consumption, hours and productivity, and reduces the spread between loan and deposit rates. The effects of the credit shock tend to be highly persistent even without price rigidities and habit persistence in consumption behaviour.en_GB
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.titleBusiness Cycle Effects of Credit and Technology Shocks in a DSGE Model with Firm Defaultsen_GB
dc.typeWorking Paperen_GB
dc.type.versionnot applicableen_GB
dc.identifier.doi10.17863/CAM.5243


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record