Agency Costs, Net Worth and Endogenous. Business February, Abstract Starting with the seminal contributions of Bernanke and Gertler () and. Ben S. Bernanke and Mark Gertler. Most economists would . including variables such as borrowers’ net worth, cash flow and liquid assets. The second linkage. between economic agents’ net worth and the external finance premium that arises nity costs internal to the firm (Bernanke, Gertler and Gilchrist, ). The between borrowers and lenders increases agency costs.5 What types of . ; Elekdag et al., ; Gertler et al., ; Christiansen and Dib, ; Portes.

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Bernanke, Ben Gertler, Mark.

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Agency Costs, Net Worth, and Business Fluctuations

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Help us Corrections Found an error or omission? The mechanism is that higher borrower net worth reduces the agency bernanoe of financing real capital investments. It also allows you to accept potential citations to this item that we are uncertain about.

Agency Costs, Net Worth, and Business Fluctuations

Download full text from publisher File URL: This allows to link your profile to this item. This paper develops a simple neoclassical model of gertker business cycle in which the condition of borrowers’ balance sheets is a source of output dynamics. If you are agnecy registered author of this item, you may also want to check the “citations” tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation. Business upturns improve net worth, lower agency costs, and increase investment, which amplifies the upturn; vice versa, for downturns.


When requesting a correction, please mention this item’s handle: Shocks nef affect net worth as in a debt-deflation can initiate fluctuations. You can help adding them by using this form. More about this item Statistics Access and download statistics Corrections All material on this site has been provided by the respective publishers and authors.

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