Frictional Capital Reallocation with Ex Post Heterogeneity
Randall Wright (),
Sylvia Xiao and
Additional contact information
Sylvia Xiao: Peking University
Review of Economic Dynamics, 2020, vol. 37 Supplement 1, S227-S253
This project studies economies with markets for capital reallocation, where gains from trade are driven by firm-specific productivity shocks, but are hindered by search frictions and liquidity considerations. Results are provided on existence, uniqueness and efficiency. The model is tractable enough to analyze monetary and fiscal policy using simple graphs. Additionally, we calibrate it to investigate quantitatively the effects of changes in productivity and credit conditions. The framework can capture several facts deemed interesting in the literature â€“ e.g., capital misallocation is countercyclical, while its price and reallocation are procyclical. We also discuss how well productivity dispersion measures inefficiencies or frictions. (Copyright: Elsevier)
Keywords: Capital; Reallocation; Investment; Frictions; Liquidity (search for similar items in EconPapers)
JEL-codes: E22 E44 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.
Software Item: Code and data files for "Frictional Capital Reallocation with Ex Post Heterogeneity" (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:red:issued:20-169
Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/
Access Statistics for this article
Review of Economic Dynamics is currently edited by Loukas Karabarbounis
More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().