Is debt overhang causing firms to underinvest?
AbstractMany economists have suggested that the weakness of corporate balance sheets is constraining business spending and investment, and that this in turn is impeding growth and the recovery. High levels of debt can depress spending and investment through several channels. This Commentary explains one of them—debt overhang can cause firms to underinvest—and points to ways in which this effect might be inhibiting the recovery.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Cleveland in its journal Economic Commentary.
Volume (Year): (2010)
Issue (Month): Jul ()
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Yan Liu & Christoph B. Rosenberg, 2013. "Dealing with Private Debt Distress in the Wake of the European Financial Crisis A Review of the Economics and Legal Toolbox," IMF Working Papers 13/44, International Monetary Fund.
- Satyajit Chatterjee, 2013. "Debt overhang: why recovery from a financial crisis can be slow," Business Review, Federal Reserve Bank of Philadelphia, issue Q2, pages 1-9.
- George M. von Furstenberg, 2011. "Concocting Marketable Cocos," Working Papers 222011, Hong Kong Institute for Monetary Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lee Faulhaber).
If references are entirely missing, you can add them using this form.