Reputation Cycles and Earnings Dynamics

Boyan Jovanovic () and Julien Prat

No 25252, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Cyclical patterns in earnings can arise when contracts between firms and their workers are incomplete, and when workers cannot borrow or lend so as to smooth their consumption. Earnings cycles generate occasional large changes in earnings, consistent with some recent empirical findings. At the calibrated parameter values, financial constraints promote investment in reputation – an intangible capital form – in contrast to their documented inhibiting effect on investment in tangible capital.

JEL-codes: D31 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-cta, nep-dge and nep-mac
Note: PR
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