We integrate bank and bond financing into a two-sector neoclassical growth model to examine the stabilization effect of … endogenous bank leverage adjustment. We show that although bank leverage amplifies shocks, the increase of leverage to a decline … in bank equity is an automatic stabilizer in downturns, since it partially offsets the decline of bank lending to …

Consumption and investment comove over the business cycle in response to shocks that permanently move the price of … investment. The interpretation of these shocks has relied on standard one-sector models or on models with two or more sectors … commingling of sectoral outputs in the assembly of final consumption and investment goods, in line with the U.S. Input …

evidence of a "demand granularity", based on investment growth shocks instead. The role of demand in explaining aggregate …

Consumption and investment comove over the business cycle in response to shocks that permanently move the price of … investment. The interpretation of these shocks has relied on standard one-sector models or on models with two or more sectors … commingling of sectoral outputs in the assembly of final consumption and investment goods, in line with the U.S. Input …

exported primary commodities, imported capital goods and intermediate inputs, and a financial shock, modeled as fluctuations in …

model are important and can generate cross-correlations of output levels, employment and investment that are compatible with …

, investment, and employment. We show that a Kiyotaki-Moore model accounts for both properties when business-cycle movements are … driven, in a significant way, by animal spirit shocks to credit-financed investment demand. The credit-based nature of such …, Bayesian estimation of our benchmark DSGE model on US data 1975-2010 shows that movements in investment driven by animal …

The objective of this paper is to explore the transmission of non-bank capital shocks through banking networks. We … develop a methodology to construct non-bank capital shocks, idiosyncratic shocks, using labor productivity shocks to large … operates through changes in bank loan supply. Our instrumental variable estimates suggest that a 1% increase in the bank loan …