Growth, slowdowns, and recoveries
Other Article (Journal Article)
We construct and estimate an endogenous growth model with debt and equity financing frictions to understand the relation between business cycle fluctuations and long-term growth. The presence of spillover effects from R&D imply an endogenous relation between productivity growth and the state of the economy. A large contractionary shock to equity financing in the 2001 recession led to a persistent growth slowdown that was more severe than in the 2008 recession. Equity (debt) financing shocks are more important for explaining R&D (physical) investment. Therefore, these two financing shocks affect the economy over different horizons.
Full Text
Duke Authors
Cited Authors
- Bianchi, F; Kung, H; Morales, G
Published Date
- January 1, 2019
Published In
Volume / Issue
- 101 /
Start / End Page
- 47 - 63
International Standard Serial Number (ISSN)
- 0304-3932
Digital Object Identifier (DOI)
- 10.1016/j.jmoneco.2018.07.001
Citation Source
- Scopus