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Title:Organizational dynamics and aggregate fluctuations: The role of financial relationships PDF Logo
Authors:Otsu, Keisuke
Saito, Masashi
Issue Date:2011
Series/Report no.:School of Economics discussion papers 11,02
Abstract:This paper constructs a dynamic stochastic general equilibrium model in which labor reallocations between production and organizational tasks generate endogenous TFP movements and also amplify and propagate the effects of exogenous shocks on macroeconomic activity. Organizational tasks in our model enhances financial relationships between firms and lenders, which lowers the credit spread. We calibrate and estimate the model using Japanese data and conduct a quantitative analysis. Our results suggest that the labor reallocation channel considered in this paper contributes greatly to the observed movements in the measured TFP, and serves as a quantitatively important amplification and propagation mechanism in aggregate fluctuations.
Subjects:labor reallocations
financial relationship
organizational capital
TFP
aggregate fluctuations
JEL:E13
E32
Document Type:Working Paper
Appears in Collections:School of Economics Discussion Papers, University of Kent

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