Macroeconomic Policy, Product Market Competition, and Growth: The Intangible Investment Channel

JaeBin Ahn, Romain Duval and Can Sever
Additional contact information
Can Sever: International Monetary Fund

International Journal of Central Banking, 2025, vol. 21, issue 4, 1-38

Abstract: While there is growing evidence of persistent or even permanent output losses from financial crises, the causes remain unclear. One candidate is intangible capital — a rising driver of economic growth that, being nonpledgeable as collateral, is also vulnerable to financial frictions. By sheltering intangible investment from financial shocks, countercyclical macroeconomic policy could strengthen longer-term growth, particularly so where strong product market competition prevents firms from self-financing their investments through rents. Using a rich cross-country firm-level data set and exploiting heterogeneity in firm-level exposure to the sharp and unforeseen tightening of credit conditions around September 2008, we find strong support for these theoretical predictions. The quantitative implications are large, highlighting a powerful stabilizing role for macroeconomic policy through the intangible investment channel, and its complementarity with pro-competitive product market deregulation.

Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ijcb.org/journal/ijcb25q4a1.pdf (application/pdf)

Related works:
Working Paper: Macroeconomic Policy, Product Market Competition, and Growth: The Intangible Investment Channel (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2025:q:4:a:1

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements ().