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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Uncertainty shocks and firm creation: Search and monitoring in the credit market, Journal of Economic Dynamics and Control February (2019). Brand, Thomas; Isoré, Marlène; Tripier, Fabien

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
Isoré Marlène / Research
All authors as text Brand, Thomas; Isoré, Marlène; Tripier, Fabien 
Number of authors
Status Published
Year of publication 2019 
Date 15.02.2019 
Name of article Uncertainty shocks and firm creation: Search and monitoring in the credit market 
Name of journal Journal of Economic Dynamics and Control
Volume of issue 99 
Number of issue February 
Pages 19-53 
Abstract We develop a business cycle model where endogenous firm creation stems from two credit market frictions. First, entrepreneurs search for a lending relationship with a bank. Second, an optimal debt contract with monitoring is implemented. We analyze the interplay between both frictions, and embed it into an otherwise standard business cycle model which we estimate with Bayesian techniques. We find that uncertainty shocks are a prime contributor to business cycle fluctuations in the US, not only for macro-financial aggregates but also for firm creation. Moreover, we point out that the credit search friction dampens the financial accelerator mechanism because default may imply the end of the lending relationship.
Free text descriptor in Finnish yritykset; epävarmuus; rahoitus; luotot; pankit; suhdannevaihtelut; mallit; yrittäjät; Yhdysvallat; 
Free text descriptor in English Uncertainty, Financial frictions, Search and matching, Business cycle, Firm creation, Firm dynamics 
JEL-codes D8, E3, E4, E5 
ISSN / e-ISSN 0165-1889 
auki Internet addresses
Additional information Available online 29 November 2018.
Notes BoF DP 34/2017 
Open Access Not known

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