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Though most economists agree that monetary policy has significant effects on the real sector in the short run, interest-rate elasticities of macroeconomic aggregates in general are found to be low. Recently, the credit channel has been discussed as an additional channel through which monetary...
Persistent link: https://www.econbiz.de/10013369958
In 1867, the "Compromise" between Austria and Hungary laid the foundation of a single currency system with a common central bank. As in today's euroland, each part of the monarchy remained sovereign in fiscal matters. Moreover, the borrowing needs of both parts of the monarchy were quite large,...
Persistent link: https://www.econbiz.de/10013369960
Using individual firm data, this study analyzes the credit channel in Austria. The estimation is based on an accelerator specification of investment demand augmented by the liquidity ratio and a firm specific user cost of capital. The results show that there is a credit channel in Austria...
Persistent link: https://www.econbiz.de/10013369975
We propose a model of firm expansion and contraction choices which integrates approaches from the industrial organization and corporate finance literature within one unified setting. Firms respond to shocks to their marginal costs by expanding or contracting output via internal or external...
Persistent link: https://www.econbiz.de/10010270097
Substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets. Although this risk is microeconomic in nature, the evidence advanced thus far has taken the form of macro correlations. This paper empirically evaluates this mechanism at the micro level by...
Persistent link: https://www.econbiz.de/10010327059
Using Swedish bank lending data, investment data and accounting data, I examine how the financial crisis affected corporate investment through its effect on credit availability. Sensitivity to a credit supply shock is measured as credit reserves, defined as unused credit on lines of credit. I...
Persistent link: https://www.econbiz.de/10010427081
The purpose of this study is to investigate how firms responded to the deterioration of bank health during the financially turbulent periods in the 2000s in making investment decisions and in meeting demand for liquidity. A rise in uncertainty regarding the ability to obtain external funds may...
Persistent link: https://www.econbiz.de/10010507361
This paper investigates the relationship between a firm's investment decision and its financial situation. We present a model of investment, where the cost of external finance is increasing in the debt ratio. The model is estimated using a panel of Norwegian manufacturing establishments for the...
Persistent link: https://www.econbiz.de/10011967881
We document countercyclical corporate saving behavior with the degree of countercyclicality varying nonmonotonically with firm size. We then develop a dynamic stochastic general equilibrium model with heterogeneous firms to explain the pattern and study its implications for business cycles. In...
Persistent link: https://www.econbiz.de/10012014514
Firm-level investment paths are commonly characterised by periods of low or zero investment punctuated by large investment 'spikes'. We document that such spikes are important for understanding firm and aggregate level investment in the UK. We show that annual variation in aggregate investment...
Persistent link: https://www.econbiz.de/10012028657