In this paper, extending the framework originally put forward by Greenwaldand Stiglitz (1988, 1990, 1993), we have developed a theoretical framework in which the financial conditions affect the capital accumulation decisions of the firm. In contrast to Greenwald and Stiglitz we allow for an...

In macroeconomic models with financial constraints (see, for instance, Greenwald and Stiglitz, 1993; Bernanke, Gertler and Gilchrist,1998; Kiyotaki and Moore,1997) firms' supply decisions depend upon the degree of financial robustness/fragility, which is identifed and measured in different ways. In the...

An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. We present an extension of Dornbusch (1987)'s...

During the Great Recession following the recent financial crisis large fiscal stimuli were implemented to counteract labor market sclerosis. We explore the effectiveness of various fiscal packages in a matching model featuring inefficient unemployment and a rich fiscal sector employing...