The long-run real effects of banking crises: firm-level investment dynamics and the role of wage rigidity
- This paper studies the long-run effects of credit market disruptions on real firm outcomes and how these effects depend on nominal wage rigidities at the firm level. I trace out the long-run investment and growth trajectories of firms which are more adversely affected by a transitory shock to aggregate credit supply. Affected firms exhibit a temporary investment gap for two years following the shock, resulting in a persistent accumulated growth gap. I show that affected firms with a higher degree of wage rigidity exhibit a steeper drop in investment and grow more slowly than affected firms with more flexible wages.
| Author: | Carlo Wix |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-451947 |
| URL: | https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3075810 |
| Parent Title (English): | SAFE working paper series ; No. 189 |
| Series (Serial Number): | SAFE working paper (189) |
| Publisher: | SAFE |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Year of Completion: | 2017 |
| Year of first Publication: | 2017 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2017/12/12 |
| Tag: | Bank Lending; Financial Crises; Firm Investment; Labor Hoarding; Real Effects; Wage Rigidity |
| Issue: | This Version: November 2017 |
| Page Number: | 68 |
| HeBIS-PPN: | 424516462 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
| Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
