
Capital reallocation and liquidity
Publication
, Journal Article
Eisfeldt, AL; Rampini, AA
Published in: Journal of Monetary Economics
April 1, 2006
This paper shows that the amount of capital reallocation between firms is procyclical. In contrast, the benefits to capital reallocation appear countercyclical. We measure the amount of reallocation using data on flows of capital across firms and the benefits to capital reallocation using several measures of the cross-sectional dispersion of the productivity of capital. We then study a calibrated model economy where capital reallocation is costly and impute the cost of reallocation. We find that the cost of reallocation needs to be substantially countercyclical to be consistent with the observed joint cyclical properties of reallocation and productivity dispersion. © 2006 Elsevier B.V. All rights reserved.
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Published In
Journal of Monetary Economics
DOI
ISSN
0304-3932
Publication Date
April 1, 2006
Volume
53
Issue
3
Start / End Page
369 / 399
Related Subject Headings
- Economics
- 3803 Economic theory
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1403 Econometrics
- 1402 Applied Economics
- 1401 Economic Theory
Citation
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Eisfeldt, A. L., & Rampini, A. A. (2006). Capital reallocation and liquidity. Journal of Monetary Economics, 53(3), 369–399. https://doi.org/10.1016/j.jmoneco.2005.04.006
Eisfeldt, A. L., and A. A. Rampini. “Capital reallocation and liquidity.” Journal of Monetary Economics 53, no. 3 (April 1, 2006): 369–99. https://doi.org/10.1016/j.jmoneco.2005.04.006.
Eisfeldt AL, Rampini AA. Capital reallocation and liquidity. Journal of Monetary Economics. 2006 Apr 1;53(3):369–99.
Eisfeldt, A. L., and A. A. Rampini. “Capital reallocation and liquidity.” Journal of Monetary Economics, vol. 53, no. 3, Apr. 2006, pp. 369–99. Scopus, doi:10.1016/j.jmoneco.2005.04.006.
Eisfeldt AL, Rampini AA. Capital reallocation and liquidity. Journal of Monetary Economics. 2006 Apr 1;53(3):369–399.

Published In
Journal of Monetary Economics
DOI
ISSN
0304-3932
Publication Date
April 1, 2006
Volume
53
Issue
3
Start / End Page
369 / 399
Related Subject Headings
- Economics
- 3803 Economic theory
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1403 Econometrics
- 1402 Applied Economics
- 1401 Economic Theory