We consider business cycles driven by exogenous changes in total factor productivity and by credit shocks. The latter are financial shocks that worsen borrowers cash on hand and reduce the fraction of collateral lenders can seize in the event of default. Our nonlinear loan rate schedules drive...

This paper quantifies the spillover effect of local exogenous shocks, such as earthquakes, to other firms through supply chain networks. Combining micro data on a large-scale inter-firm transaction network and geographic information on firm location, we examine the firm level impact of supply...