Appendix for Financial Frictions and Fluctuations in Volatility

Cristina Arellano, Yan Bai and Patrick Kehoe

No 538, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: This appendix contains five sections. Section 1 provides details for the comparative statics exercise performed in the simple example. Section 2 discusses extending the model to allow firms to default on the wages for managers. Section 3 describes the firm-level and aggregate data. Section 4 contains the details of the computational algorithm. Finally, Section 5 reports the results for our model with a lower labor elasticity.

Keywords: Uncertainty shocks; Firm heterogeneity; Labor wedge; Credit constraints; Great Recession; Credit crunch (search for similar items in EconPapers)
JEL-codes: D52 D53 E23 E24 E32 E44 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2017-01-24
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ore
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