Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265221 
Year of Publication: 
2022
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2022-27
Publisher: 
Bank of Canada, Ottawa
Abstract: 
We study economies where firms acquire capital in primary markets then retrade it in secondary markets after information on idiosyncratic productivity arrives. Our secondary markets incorporate bilateral trade with search, bargaining and liquidity frictions. We distinguish between full and partial sales (one firm gets all or some of the other's capital). Both exhibit interesting long- and short-run patterns in data that the model can match. Depending on monetary and credit conditions, more partial sales occur when liquidity is tight. Quantitatively, we find significant steady-state and business-cycle implications. We also investigate the impact of search, taxation and persistence in firm-specific shocks.
Subjects: 
Monetary policy
Business fluctuations and cycles
JEL: 
E22
E44
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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