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The Macroeconomics of Corporate Debt

Author

Listed:
  • Markus Brunnermeier
  • Arvind Krishnamurthy

Abstract

The 2020 COVID-19 crisis can spur research on firms’ corporate finance decisions and their macroeconomic implications, similar to the wave of important research on banking and household finance triggered by the 2008 financial crisis. What are the relevant corporate finance mechanisms in this crisis? Modeling dynamics and timing considerations are likely important, as is integrating corporate financing considerations into modern quantifiable macroeconomics models. Recent empirical work, including articles in this special issue, on the drag from debt in the COVID-19 crisis provides a first glimpse into the new research agenda. (JEL E22, E44, G32, G33)Received July 23, 2020; editorial decision: July 23, 2020 by Editor Andrew Ellul

Suggested Citation

  • Markus Brunnermeier & Arvind Krishnamurthy, 2020. "The Macroeconomics of Corporate Debt," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 656-665.
    • Handle: RePEc:oup:rcorpf:v:9:y:2020:i:3:p:656-665.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfaa015
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    Citations

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    Cited by:

    1. Federico Huneeus & Joseph Kaboski & Mauricio Larrain & Sergio Schmukler & Mario Vera, 2022. "The Distribution of Crisis Credit: Effects on Firm Indebtedness and Aggregate Risk," Working Papers Central Bank of Chile 942, Central Bank of Chile.
    2. Fattouh, Bassam & Pisicoli, Beniamino & Scaramozzino, Pasquale, 2024. "Debt and financial fragility: Italian non-financial companies after the pandemic," Economic Modelling, Elsevier, vol. 131(C).
    3. Òscar Jordà & Martin Kornejew & Moritz Schularick & Alan M Taylor, 2022. "Zombies at Large? Corporate Debt Overhang and the Macroeconomy," The Review of Financial Studies, Society for Financial Studies, vol. 35(10), pages 4561-4586.
    4. Hayley Pallan, 2022. "Do Investors Care About Consumption Taxes? Evidence from Equities in Advanced and Emerging Economies," IHEID Working Papers 14-2022, Economics Section, The Graduate Institute of International Studies.
    5. Moramarco, Graziano, 2024. "Financial-cycle ratios and medium-term predictions of GDP: Evidence from the United States," International Journal of Forecasting, Elsevier, vol. 40(2), pages 777-795.
    6. Liu, Yu & Wei, Siqi & Xu, Jian, 2021. "COVID-19 and Women-Led Businesses around the World," Finance Research Letters, Elsevier, vol. 43(C).
    7. Marco Pagano & Josef Zechner, 2022. "COVID-19 and Corporate Finance [The risk of being a fallen angel and the corporate dash for cash in the midst of COVID]," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 11(4), pages 849-879.
    8. Zofia Gródek-Szostak & Jadwiga Adamczyk & Małgorzata Luc & Marcin Suder & Justyna Tora & Karolina Kotulewicz-Wisińska & Wojciech Zysk & Anna Szeląg-Sikora, 2022. "Hard Cash in Hard Times—The Effect of Institutional Support for Businesses Shaken by COVID-19," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    9. John Hlias Plikas & Dimitrios Kenourgios & Georgios A. Savvakis, 2024. "COVID-19 and Non-Performing Loans in Europe," JRFM, MDPI, vol. 17(7), pages 1-48, June.
    10. Goldstein, Michael A. & Namin, Elmira Shekari, 2023. "Corporate bond liquidity and yield spreads: A review," Research in International Business and Finance, Elsevier, vol. 65(C).
    11. Ozan Güler & Mike Mariathasan & Klaas Mulier & Nejat G. Okatan, 2021. "The real effects of banks' corporate credit supply: A literature review," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1252-1285, July.
    12. Hazwan Haini & Pang Wei Loon & Lawal Olamilekan Abdulwahab & Wafid Sophian, 2024. "Did government support delay bankruptcy during the pandemic?," Economic Affairs, Wiley Blackwell, vol. 44(1), pages 17-30, February.
    13. Moritz Schularick, 2021. "Corporate indebtedness and macroeconomic stabilisation from a long-term perspective," ECONtribute Policy Brief Series 024, University of Bonn and University of Cologne, Germany.
    14. Issa, Samar & Gevorkyan, Aleksandr V., 2022. "Optimal corporate leverage and speculative cycles: an empirical estimation," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 478-491.

    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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