Firms Dynamics, Bankruptcy Laws and Total Factor Productivity

Hajime Tomura

Staff Working Papers from Bank of Canada

Abstract: This paper analyzes endogenous fluctuations in total factor productivity (TFP) in a dynamic general equilibrium model with heterogeneous agents, and illustrates the interaction of credit market frictions, asset prices, the entry and exit of firms, and fluctuations in TFP in response to firm-level productivity and aggregate credit-market shocks. I also analyze the effect of bankruptcy and foreclosure laws on fluctuations in TFP through their effect on credit market frictions. Implications of the model are consistent with the features of the stagnation in Japan in the 1990s.

Keywords: Financial stability; Productivity (search for similar items in EconPapers)
JEL-codes: D24 E44 G33 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2007
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-dge, nep-eff and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:07-17

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