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When do credit frictions matter for business cycles?

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  • Felipe Schwartzman

Abstract

Since the Great Recession there has been renewed interest in introducing credit frictions in business cycle models. However, in order for credit frictions to be quantitatively meaningful and qualitatively realistic in business cycles, it is necessary to depart from conventional assumptions about production technology or preferences and/or add additional frictions. This article reviews some of those departures and additions.

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  • Felipe Schwartzman, 2012. "When do credit frictions matter for business cycles?," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 98(3Q), pages 209-230.
    • Handle: RePEc:fip:fedreq:y:2012:i:3q:p:209-230:n:v.98no.3
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    Cited by:

    1. Eric Leeper & James Nason, 2014. "Bringing Financial Stability into Monetary Policy," CAEPR Working Papers 2014-003, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    2. Pablo Ottonello, 2015. "Capital Unemployment, Financial Shocks, and Investment Slumps," 2015 Meeting Papers 1153, Society for Economic Dynamics.
    3. Matthew Knowles, 2023. "Capital Deaccumulation and the Large Persistent Effects of Financial Crises," ECONtribute Discussion Papers Series 218, University of Bonn and University of Cologne, Germany.

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