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The determinants of aggregate fluctuations: The role of firm‐borrowing channels.
- Source :
- Manchester School (1463-6786); Jan2022, Vol. 90 Issue 1, p20-34, 15p
- Publication Year :
- 2022
-
Abstract
- The paper examines the empirical relationship between firm‐borrowing channels and aggregate fluctuations for the 100 largest US firms over 2000–2018. The motivation for this study originates from the general consensus in macroeconomics that microeconomic shocks to firms cannot generate significant aggregate fluctuations. The analysis extends Gabaix's 2011 baseline model by incorporating measures for "bank shocks" at the firm‐level. In addition to supporting the granular hypothesis, the econometric results indicate that bank shocks have a weak impact on GDP fluctuations, whereas non‐bank loans exert a strong impact on the same. The above findings survive certain robustness checks associated with the presence of oil and monetary shocks, as well as with the firms' location factor. [ABSTRACT FROM AUTHOR]
- Subjects :
- EMPIRICAL research
BUSINESS cycles
MACROECONOMICS
FINANCE
Subjects
Details
- Language :
- English
- ISSN :
- 14636786
- Volume :
- 90
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- Manchester School (1463-6786)
- Publication Type :
- Academic Journal
- Accession number :
- 154104537
- Full Text :
- https://doi.org/10.1111/manc.12385