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Financial shocks and the relative dynamics of tangible and intangible investment: evidence from the euro area
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Authors and Corporations: | , |
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Other Authors: | Mayer, Eric 1973- [Author] |
Type of Resource: | E-Book |
Language: | English |
published: | |
Series: |
Deutsche Bundesbank: Discussion paper ; no 2020, 39
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Subjects: | |
Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
ISBN: | 9783957297402 |
Summary: | We develop an extended real business cycle (RBC) model with financially con-strained firms and non-pledgeable intangible capital. Based on a model-consistentseries for firms’ borrowing conditions, we find, within a structural vector autoregres-sion (SVAR) framework, that, in response to an adverse financial shock, tangible in-vestment falls more than intangible investment. This positive co-movement betweentangible and intangible investment as well as the relative resilience of intangibleinvestment pose a challenge for the theoretical model. We show that investment-specific adjustment costs help in reconciling the model with the observed empiricalevidence. The estimation of the theoretical model using a Bayesian limited infor-mation approach yields support for the presence of much larger adjustment costsfor intangible investment than for tangible investment. |
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Physical Description: | 1 Online-Ressource (circa 33 Seiten); Illustrationen |
ISBN: | 9783957297402 |