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