Financial constraints, endogenous markups, and self-fulfilling equilibria
نویسندگان
چکیده
منابع مشابه
Financial Constraints , Endogenous Markups , and Self - fulfilling Equilibria
3 We show that self-fulfilling equilibria and indeterminacy can easily arise in a simple financial accelerator model with reasonable 4 parameter calibrations and without increasing returns in production. A key feature for generating indeterminacy in our model is 5 the countercyclical markup due to the procyclical loan to output ratio. We illustrate, via simulations, that our financial accelerat...
متن کاملPersistent Markups in Bidding Markets with Financial Constraints∗
This paper studies the impact of financial constraints on the persistency of high markups in a class of markets, including public procurement, known by practitioners as bidding markets. We develop an infinite horizon model in which two firms optimally reinvest working capital and bid for a procurement contract each period. Working capital is constrained by the firm’s cash from previous period a...
متن کاملUniqueness and Stability of Equilibria in a Model with Endogenous Markups and Labor Supply
The presence of public policy in models with multiple steady states is known to be capable of reducing the set of equilibria. This paper shows that in a simple growth model with endogenous markups, introducing an endogenous laborleisure choice also helps eliminate multiple steady state equilibria. Moreover, it alters the stability condition of the unique steady state as well; namely, the steady...
متن کاملSelf‐fulfilling Credit Cycles Self-fulfilling Credit Cycles
This paper argues that self-fulfilling beliefs in credit conditions can generate endogenously persistent business cycle dynamics. We develop a tractable dynamic general equilibrium model with idiosyncratic firm productivity shocks. Capital from less productive firms is lent to more productive ones in the form of credit secured by collateral and also as unsecured credit based on reputation. A dy...
متن کاملExternal Financing and Customer Capital: A Financial Theory of Markups
We propose a dynamic structural corporate model in which firms face imperfect capital markets and frictional product markets. We highlight the importance of the endogeneity of firms’ short-term cash flows and the endogeneity of the marginal value of liquidity in determining the interactions between investment, financing and product price setting decisions. Our primary goal is to develop a finan...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Journal of Monetary Economics
سال: 2013
ISSN: 0304-3932
DOI: 10.1016/j.jmoneco.2013.06.004