Zombies at Large? Corporate Debt Overhang and the Macroeconomy

Oscar Jorda, Martin Kornejew (), Moritz Schularick and Alan Taylor
Additional contact information
Martin Kornejew: University of Bonn

No inetwp168, Working Papers Series from Institute for New Economic Thinking

Abstract: What are the macroeconomic consequences of business credit booms? Are they as dangerous as household credit booms? If not, why not? We answer these questions by collecting data on non-financial business liabilities (primarily bank loans and corporate bonds) for 17 advanced economies over the past 150 years. Unlike household credit, business credit booms are rarely followed by macroeconomic hangovers. Data on debt renegotiation costs—instrumented by a country’s legal tradition—show that frictions to debt resolution make recessions deeper and longer—an important factor in explaining the differences with household credit booms.

Keywords: corporate debt; business cycles; local projections. (search for similar items in EconPapers)
JEL-codes: E44 G32 G33 N20 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2021-10-15
New Economics Papers: this item is included in nep-cfn, nep-fdg, nep-his and nep-mac
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https://www.ineteconomics.org/uploads/papers/WP_168-Schularick-et-al.pdf (application/pdf)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3742973 First version, 2021 (text/html)

Related works:
Journal Article: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020)
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp168

DOI: 10.36687/inetwp168

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