My da|ra Login

Detailed view

metadata language: English

Replication data for: Credit Constraints and Self-Fulfilling Business Cycles

Version
V0
Resource Type
Dataset
Creator
  • Liu, Zheng
  • Wang, Pengfei
Publication Date
2014-01-01
Description
  • Abstract

    We argue that credit constraints not only amplify fundamental shocks, they can also lead to self-fulfilling business cycles. We study a model with heterogeneous firms, in which imperfect contract enforcement implies that productive firms face binding credit constraints, with the borrowing capacity limited by expected equity value. A drop in equity value tightens credit constraints and reallocates resources from productive to unproductive firms. Such reallocation reduces aggregate productivity, further depresses equity value, generating a financial multiplier. Aggregate dynamics are isomorphic to those in a representative-agent economy with increasing returns. For sufficiently tight credit constraints, the model generates self-fulfilling business cycles.
Availability
Download
Relations
  • Is supplement to
    DOI: 10.1257/mac.6.1.32 (Text)
Publications
  • Liu, Zheng, and Pengfei Wang. “Credit Constraints and Self-Fulfilling Business Cycles.” American Economic Journal: Macroeconomics 6, no. 1 (January 2014): 32–69. https://doi.org/10.1257/mac.6.1.32.
    • ID: 10.1257/mac.6.1.32 (DOI)

Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-13

Liu, Zheng; Wang, Pengfei (2014): Replication data for: Credit Constraints and Self-Fulfilling Business Cycles. Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E114289