蝌蚪网

This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. 蝌蚪网
  3. 蝌蚪网 Review
  4. February 2012
  5. Macroeconomic Effects of Financial Shocks

蝌蚪网 Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Macroeconomic Effects of Financial Shocks

  • Urban Jermann
  • Vincenzo Quadrini
蝌蚪网 Review
vol. 102, no. 1, February 2012
(pp. 238–71)
Download Full Text PDF

Abstract

We document the cyclical properties of US firms' financial flows and show that equity payout is procyclical and debt payout is countercyclical. We then develop a model with debt and equity financing to explore how the dynamics of real and financial variables are affected by "financial shocks." We find that financial shocks contributed significantly to the observed dynamics of real and financial variables. The recent events in the financial sector show up as a tightening of firms' financing conditions which contributed to the 2008-2009 recession. The downturns in 1990-1991 and 2001 were also influenced by changes in credit conditions. (JEL E23, E32, E44, G01, G32)

Citation

Jermann, Urban, and Vincenzo Quadrini. 2012. "Macroeconomic Effects of Financial Shocks." 蝌蚪网 Review 102 (1): 238–71. DOI: 10.1257/aer.102.1.238

Additional Materials

JEL Classification

  • E23 Macroeconomics: Production
  • E32 Business Fluctuations; Cycles
  • E44 Financial Markets and the Macroeconomy
  • G01 Financial Crises
  • G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms