Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/171923 
Authors: 
Year of Publication: 
2017
Series/Report no.: 
SAFE Working Paper No. 189
Publisher: 
Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe, Frankfurt a. M.
Abstract: 
This paper studies the long-run effects of credit market disruptions on real firm outcomes and how these effects depend on nominal wage rigidities at the firm level. I trace out the long-run investment and growth trajectories of firms which are more adversely affected by a transitory shock to aggregate credit supply. Affected firms exhibit a temporary investment gap for two years following the shock, resulting in a persistent accumulated growth gap. I show that affected firms with a higher degree of wage rigidity exhibit a steeper drop in investment and grow more slowly than affected firms with more flexible wages.
Subjects: 
Financial Crises
Bank Lending
Real Effects
Firm Investment
Wage Rigidity
Labor Hoarding
JEL: 
E22
E24
E51
G01
G21
G31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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