search query: @author Bacchetta, P. / total: 8
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| Author: | Bacchetta, P. Caminal, R. |
| Title: | Do capital market imperfections exacerbate output fluctuations? |
| Journal: | European Economic Review
2000 : MAR, VOL. 44:3, p. 449-468 |
| Index terms: | Credit markets Business cycles Models |
| Freeterms: | Agency costs |
| Language: | eng |
| Abstract: | The paper developes a dynamic general equilibrium macroeconomic model where a proportion of firms are credit constrained due to asymmetric information. In general, a macroeconomic shock has additional effects created by a reallocation of funds btw. credit-constrained and unconstrained firms, as they have different marginal productivities. The paper shows, however, that the output response to shocks is not necessarily amplified and can be dampened by the presence of asymmetric information. This depends on the impact of the shock on the composition of external and internal funds for credit-constrained firms. |
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