(3052 K) Ben Bernanke,
Office Pro 2007, Mark Gertler, Simon Gilchrist
NBER Working Paper No. 6455
Issued in March 1998
NBER Program(s): ME EFG
This paper develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint. The model is a synthesis of the leading approaches in the literature. In particular, the framework exhibits a financial accelerator,' in that endogenous developments in credit markets work to amplify and propagate shocks to the macroeconomy. In addition, we add several features to the model that are designed to enhance the empirical relevance. First, we incorporate money and price stickiness,
Windows 7 Professional Key, which allows us to study how credit market frictions may influence the transmission of monetary policy. In addition, we allow for lags in investment which enables the model to generate both hump-shaped output dynamics and a lead-lag relation between asset prices and investment, as is consistent with the data. Finally, we allow for heterogeneity among firms to capture the fact that borrowers have differential access to capital markets. Under reasonable parametrizations of the model,
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Published: Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1,
Office Ultimate 2007, volume 1, chapter 21, pages 1341-1393 Elsevier. ,
Office 2007 Enterprise Key, Review of Economics and Statistics, Vol. 78, no. 1 (February 1996): 1-15. This paper is available as PDF (3052 K) or via email.
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Office Pro Plus 2007 Key The Financial Accelerator
Linear Mode
