We examine permanent effects of monetary expansion in an economy where access to credit for financing consumption and investment is limited and consumers and firms are cash-constrained. The main difference between our model with those of Cooley-Hanson (1989) and Walsh (2003) is that investment, in addition to consumption, is subject to a cash-constraint. In this respect, our model is...

Introducing extrapolation bias into a standard one-sector production-based real business cycle model with recursive preferences reconciles salient stylized facts about business cycles (low consumption volatility and high investment volatility relative to output) and financial markets (high equity premium, volatile stock returns, and a low and smooth riskfree rate) with low relative risk aversio...

Using information on firms’ inventory, we introduce a novel approach to estimate the causal effect of transport infrastructure on the economy. We apply this approach to China, where the length of road has tripled and the inventory-sales ratio has declined by three quarters since 1978. Our identification tests suggest that these two phenomena are causally linked (with data covering medium and la...

The study of memory for event duration in pigeons has, for the most part, centered on an unusual behavioral phenomenon and an interesting theoretical explanation for it. A typical experiment on memory for event duration involves trials initiated by a sample stimulus that is either short or long in duration (e.g., 2 vs. 10 sec of houselight) and that is later followed by the simultaneous present...

Output factor (Scp) is one of the important factors required to calculate monitor unit (MU), and is divided into two components: phantom scatter factor (Sp) and in-air output ratio (Sc). Generally, Sc for arbitrary fields are calculated using several methods based on Sc determined by the absorbed dose measurement for several square fields. However, there are calculation errors when the treatmen...

We use forward-looking and exogenous measures of output price uncertainty to examine the effect of price uncertainty on firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm size. When faced with high price uncertainty, large firms increase their hedging intensity but do not lower capital investment or debt issuance. In contrast...

In contrast to industrialized countries, emerging market economies are characterized by proor acyclical monetary policies and high output volatility. This paper argues that those facts can be related to a long-run feature of the economy – namely, its institutional quality (IQL). The paper presents evidence that supports the link between an index of IQL (law and order, government stability, inve...

A model of macroeconomic complementarity is used to assess causes of comovement in investment spending across nine sectors of the U.S. economy. It is hypothesized that the irreversibility and uncertainty of investment spending imply a greater role for investment linkages and aggregate factors in investment fluctuations compared with estimates for employment and output. For the average sector, p...

This paper quantifies the aggregate effects of financing constraints. We start from a standard dynamic investment model with collateral In contrast to existing quantitative literature, our estimation does not target mean leverage ratio identify scope frictions. Instead, we use reduced-form coefficient recent corporate finance literature that connects exogenous debt capacity shocks investment. R...