Nolan, Charles; Thoenissen, Christoph - Scottish Institute for Research in Economics (SIRE) - 2008
Employing the financial accelerator (FA) model of Bernanke, Gertler and Gilchrist (1999) enhanced to include a shock to the FA mechanism, we construct and study shocks to the efficiency of the financial sector in post-war US business cycles. We find that financial shocks are very tightly linked...