Search Results - subject:"Liquidity constraints"

Investment Shocks, Tax Evasion and the Consumption Puzzle : A DSGE Analysis with Financial Frictions

Chiarini, Bruno - 2016

This paper contributes to the GDP-consumption co-movement puzzle literature investigating the role of tax evasion in explaining the consumption path after a Marginal Efficiency of Investment shock. We use an otherwise standard medium-scale New Keynesian DSGE model combining tax evasion with...

Persistent link: https://www.econbiz.de/10012984510

Occasionally Binding Liquidity Constraints and Macroeconomic Dynamics

Werner, Maximilian Ulrich - 2016

In this paper, I conduct a quantitative comparison upon different methodological treatments of a financial constraint. I compute two solutions to a version of the Kiyotaki and Moore (2012) RBC-model. In this framework, aggregate investment as well as the overall trading volume in the equity...

Persistent link: https://www.econbiz.de/10012984561

Pecuniary Externalities in Economies with Financial Frictions

Dávila, Eduardo - 2016

This paper characterizes the efficiency properties of competitive economies with financial constraints, in which phenomena such as fire sales and financial amplification may arise. We show that financial constraints lead to two distinct types of pecuniary externalities: distributive...

Persistent link: https://www.econbiz.de/10012986288

Consumer Default, Credit Reporting and Borrowing Constraints

Garmaise, Mark J. - 2016

Why do negative credit events lead to long-term borrowing constraints? Exploiting banking regulations in Peru and utilizing currency movements, we show that consumers who face a credit rating downgrade due to bad luck experience a three-year reduction in financing. Consumers respond to the shock...

Persistent link: https://www.econbiz.de/10012978257

Liquidity, Innovation, and Endogenous Growth

Malamud, Semyon - 2016

We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that financing constraints lead firms to decrease production but may spur investment in innovation (R&D). We...

Persistent link: https://www.econbiz.de/10012988600

Household Saving Behavior and Credit Constraints in the Euro Area

Le Blanc, Julia - 2016

of respondents. Households living in Mediterranean countries report to be more subject to binding liquidity constraints …We study the role of household saving behaviour, of individual motives for saving and that of perceived liquidity … constraints in 15 Euro Area countries. The empirical analysis is based on the Household Finance and Consumption Survey, a new …

Persistent link: https://www.econbiz.de/10012988731

Asset Prices, Collateral, and Unconventional Monetary Policy in a DSGE Model

Hilberg, Björn - 2016

In this paper we set up a New-Keynesian model with a heterogenous banking sector to analyze liquidity problems on the interbank market. The presence of an interbank market is essential to consider a situation where an increased liquidity supply by the central bank is only partially passed on to...

Persistent link: https://www.econbiz.de/10012988760

Does Wagner's Law Ruin the Sustainability of German Public Finances?

Priesmeier, Christoph - 2016

The empirical and theoretical literature on long-term relationships in public finance is dominated by two approaches: Fiscal sustainability and Wagner's law of an increasing state activity. In this paper, we argue that these two relationships should be analyzed simultaneously and not separately....

Persistent link: https://www.econbiz.de/10012988827

Assessing Macro-Financial Linkages : A Model Comparison Exercise

Gerke, Rafael - 2016

The recent global financial crisis has increased interest in macroeconomic models that incorporate financial linkages. Here, we compare the simulation properties of five mediumsized general equilibrium models used in Eurosystem central banks which incorporate such linkages. The financial...

Persistent link: https://www.econbiz.de/10012988828

Trend Growth Expectations and Us House Prices Before and after the Crisis

Hoffmann, Mathias - 2016

We provide an analysis that might help distinguish rationally justified movements in house prices from potentially non-rational movements, using a two-sector business cycle model, in which investment in housing is subject to collateral constraints. A large portion of the evolution of U.S. house...

Persistent link: https://www.econbiz.de/10012988832