WebMar 19, 2024 · Credit frictions in the Great Recession. Capital—whether it takes the form of cash, credit, or human capital like education and job skills—is the lifeblood of an economy. When it dries up, the economy withers. The Great Recession was a tragic example of such a dysfunction: The U.S. economy collapsed when the debt instruments … Web2007 accounting methodology, it is shown that measured labor wedges, often associated with distortions, deteriorated much faster for countries that were more severely affected by the debt crisis. When regressed against a set of controls, worse labor wedges wedges are statistically associated with higher government interest rate spreads thus ...
Taxation, credit frictions and the cyclical behavior of the labor wedge ...
WebThe class of borrowing constraints we consider are motivated by the need for debt to be “self-enforcing;” that is, utility is at least as great by paying back the debt than it is from … http://www.virgiliumidrigan.com/uploads/1/3/9/8/13982648/kmp_aeapp2.pdf good beaches near kuala lumpur
Debt Constraints and the Labor Wedge - Research Papers …
Webfrictions exist that create a wedge between the cost of external capital and the cost of internal capital, firms may no longer be able to fund all profitable investment projects. ... debt constraints are less likely to issue or reduce both debt and equity in the next period, suggesting that debt is the limiting constraint. In addition, firms ... WebMay 1, 2016 · debt constraints acts like an implicit tax on labor. Whether this implicit tax is suf ciently large to generate a drop in employment depends on the strength of the wealth … Web[6] Debt Constraints and the Labor Wedge. 2016. (with Patrick Kehoe and Elena Pastorino) American Economic Review (Papers and Proceedings) [5] Microeconomic Uncertainty, International Trade, and Aggregate Fluctuations. 2015. (with George Alessandria, Horag Choi and Joseph Kaboski). good beaches near me in kissimmee