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In the past decade, the Chinese economy has witnessed a great housing boom, accompanied by a slowdown in economic growth and an increase in firms' financial investment. The waning economic prospects are shown to lead to a surge in housing prices by stimulating firms' demand for financial...
Persistent link: https://www.econbiz.de/10012892842
There is increasing evidence that the vibrant financial industry has generated a misallocation of human capital between the manufacturing sector and the service sector. In addition, growth in the financial sector has usually been accompanied by bubble booms. Thus, this paper advances a greater...
Persistent link: https://www.econbiz.de/10013324348
A large number of financial assets are traded in both exchanges and over-the-counter markets (i.e., centralized and decentralized markets, CM and DM hereafter, respectively). Moreover, as documented by Biais and Green (2019), the 20th century has witnessed a secular migration of asset trade from...
Persistent link: https://www.econbiz.de/10012663658
Persistent link: https://www.econbiz.de/10012230139
The Great Recession has witnessed not only a marked disruption in the credit markets and a sharp increase of capital unemployment but also a severe deterioration of the matching efficiency in the labor market, as evidenced by the historically high unemployment rate and a significant outward...
Persistent link: https://www.econbiz.de/10012861832
Using household-level survey and housing transaction data, we detect the flight to safety vis-a-vis housing in China: Great economic uncertainty causes the prices of housing assets to soar, especially those of good quality. To stabilize housing prices, China has imposed purchase restrictions on...
Persistent link: https://www.econbiz.de/10012890334
We offer a tractable dynamic theory where excessive credit creation by the frictional banking sector may lead to over-investment and then endogenous boom-bust cycles. We formalize the idea in a general equilibrium framework with banks and financially constrained heterogeneous firms. In the...
Persistent link: https://www.econbiz.de/10012851196
As the largest source of carbon emissions in China, the thermal power industry is the only emission-controlled industry in the first national carbon market compliance cycle. Its conversion to clean-energy generation technologies is also an important means of reducing CO2 emissions and achieving...
Persistent link: https://www.econbiz.de/10014288908
China is now facing the challenges of high leverage. Our study has examined the role of firms’ rising debt in explaining the decrease in labor share in recent years. We developed a model to show that firms may strategically use debt to increase their bargaining power, resulting in lower labor...
Persistent link: https://www.econbiz.de/10013163672
We introduce a simple adverse selection problem arising in credit markets into a standard textbook real business cycle model. There is a continuum of households and a continuum of anonymous producers who produce the final goods from intermediate goods. These producers do not have the resources...
Persistent link: https://www.econbiz.de/10013044560