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Macroeconomic Effects of Financial Shocks
We document the cyclical properties of US firms' financial flows and show that equity payout is procyclical and debt payout is countercyclical. We then develop a model with debt and equity financing to explore how the dynamics of real and financial variables are affected by "financial shoc...
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| Published in: | The American economic review 2012-02, Vol.102 (1), p.238-271 |
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| Main Authors: | , |
| Format: | Article |
| Language: | English |
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| cited_by | cdi_FETCH-LOGICAL-c487t-32f8fe90e9bd32ef821511018516b6fa2b72c6538b5b2283fe90fb00f1b4a9443 |
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| cites | cdi_FETCH-LOGICAL-c487t-32f8fe90e9bd32ef821511018516b6fa2b72c6538b5b2283fe90fb00f1b4a9443 |
| container_end_page | 271 |
| container_issue | 1 |
| container_start_page | 238 |
| container_title | The American economic review |
| container_volume | 102 |
| creator | Jermann, Urban Quadrini, Vincenzo |
| description | We document the cyclical properties of US firms' financial flows and show that equity payout is procyclical and debt payout is countercyclical. We then develop a model with debt and equity financing to explore how the dynamics of real and financial variables are affected by "financial shocks." We find that financial shocks contributed significantly to the observed dynamics of real and financial variables. The recent events in the financial sector show up as a tightening of firms' financing conditions which contributed to the 2008-2009 recession. The downturns in 1990-1991 and 2001 were also influenced by changes in credit conditions. |
| doi_str_mv | 10.1257/aer.102.1.238 |
| format | article |
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| identifier | ISSN: 0002-8282 |
| ispartof | The American economic review, 2012-02, Vol.102 (1), p.238-271 |
| issn | 0002-8282 1944-7981 |
| language | eng |
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| source | EconLit s plnými texty; International Bibliography of the Social Sciences (IBSS); ABI/INFORM Collection; Business Source Ultimate【Trial: -2024/12/31】【Remote access available】; JSTOR Archival Journals and Primary Sources Collection; Social Science Premium Collection; American Economic Association |
| subjects | Business cycles Credit market Debt Debt to equity ratio Economic fluctuations Economic impact Economic models Economic recessions Economic shock Economic theory Enforcement Enterprises Equity Finance Financial crisis Financial services Financing methods GDP Gross Domestic Product Macroeconomic modeling Macroeconomics Productivity Public debt Recessions Stockholders Studies U.S.A Variables |
| title | Macroeconomic Effects of Financial Shocks |
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