Artikel
Slow Debt, Deep Recessions
Business credit lags GDP growth by about one year. This contributes to high leverage during recessions and slow deleveraging. We show that a model in which firms use risky long-term debt replicates this slow adjustment of firm debt. In the model, slow-moving debt has important effects for real activity. High levels of firm debt issued during expansions are only gradually reduced during recessions. This generates an adverse feedback loop between high default rates and low investment and thereby amplifies the downturn. Sluggish deleveraging slows down the recovery.
- Sprache
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Englisch
- Erschienen in
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Journal: American Economic Journal: Macroeconomics ; ISSN: 1945-7715 ; Volume: 14 ; Year: 2022 ; Issue: 1 ; Pages: 224-259 ; Nashville, TN: American Economic Association
- Klassifikation
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Wirtschaft
Macroeconomics: Production
Business Fluctuations; Cycles
Financial Markets and the Macroeconomy
Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Jungherr, Joachim
Schott, Immo
- Ereignis
-
Veröffentlichung
- (wer)
-
American Economic Association
- (wo)
-
Nashville, TN
- (wann)
-
2022
- DOI
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doi:10.1257/mac.20190306
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Artikel
Beteiligte
- Jungherr, Joachim
- Schott, Immo
- American Economic Association
Entstanden
- 2022
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