Financial shocks, comovement and credit frictions

Daria Finocchiaro and Caterina Mendicino

Economics Letters, 2016, vol. 143, issue C, 20-23

Abstract: In models with frictional financial markets, the specification of the borrowing constraint is crucial to generating comovement between macro variables and asset prices after credit shocks. The interaction between financial frictions and labor demand is key to the results.

Keywords: Financial shocks; Borrowing constraints; Asset prices; Comovement (search for similar items in EconPapers)
JEL-codes: E32 E44 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:143:y:2016:i:c:p:20-23

DOI: 10.1016/j.econlet.2016.03.017

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