Article history: Received 20 August 2010 Received in revised form 24 October 2013 Available online 31 October 2013 JEL classification: E32 D43

This paper provides a theoretical model of an open economy credit channel including currency mismatch and financial fragility where exporting firms have access to international credit but non-exporting firms do not. The impact of the crisis is predicted to be dramatically different for exporters/non-exporters. We examine firms’ access to external finance in four Asian economies after 1997 using...

We investigate with German data how the use of temporary agency work has helped establishments to manage the economic and financial crisis in 2008/09. We examine the (regular) workforce development, use of short-time work, and business performance of establishments that made differential use of temporary agency work prior to the crisis. Overall, our results suggest that establishments with a gr...

Many economists believe that credit market distortions create a financial accelerator which destabilizes the economy. This paper shows that when credit market distortions arise from adverse selection they sometimes stabilize the economy rather than destabilize it. The stabilizing forces are closely related to forces that cause overinvestment in static models. When investment projects are equity...

Innovating in downturns can affect corporate success because it improves a firm’s position relative to competitors during the recovery period. However, increased uncertainty and more binding financial constraints complicate such innovation activity. I find that past experience with innovation during recessions improves a firm’s ability to invest in R&D when a new downturn hits. This result hold...

________________________________________________________________________ Abstract This study examines the sensitivity of equity values of oil producers to changes in the uncertainty of future oil prices. We document that this sensitivity is negatively correlated with a firm's debt ratio and its production costs. These results indicate that companies that are more likely to experience financial ...

We find that declining bank credit to the private sector will not necessarily constrain the economic recovery after output has bottomed out following a financial crisis. To obtain this result, we examine data from 39 financial crises, which – as the current one – were preceded by credit booms. In these crises the change in bank credit, either in real terms or relative to GDP, consistently did n...

This paper extends Nolan and Thoenissen (2009), hence NT, model with an explicit financial intermediary that transfer funds from households to entrepreneurs subject to a well defined loan production function. The loan productivity shock is treated as the supply side financial disturbance. Together with NT’s net worth shock that resembles the credit demand perturbation, both of the two-sided sho...

Many emerging economies have experienced current account reversals followed by large declines in economic activity. These sudden stops are reflected in their real interest rates, which alternate between tranquil times, when the level is relatively low and stable, and crises, during which interest rates are higher and more volatile. We embed an estimated regime switching process of interest rate...

This paper examines the role of external shocks in explaining macroeconomic fluctuations in African countries. We construct a quantitative, stochastic, dynamic, multi-sector equilibrium model of a small open economy calibrated to represent a "typical" African economy. In our framework, external shocks consist of trade shocks, modeled as fluctuations in the prices of exported primary commodities...