Further processing options
available via Open Access

Financial shocks and the relative dynamics of tangible and intangible investment: evidence from the euro area

Saved in:

Bibliographic Details
Authors and Corporations: Gareis, Johannes (Author), Mayer, Eric (Author)
Other Authors: Mayer, Eric 1973- [Author]
Type of Resource: E-Book
Language: English
published:
Frankfurt am Main Deutsche Bundesbank [2020]
Series: Deutsche Bundesbank: Discussion paper ; no 2020, 39
Subjects:
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
ISBN: 9783957297402
Description
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.
Physical Description: 1 Online-Ressource (circa 33 Seiten); Illustrationen
ISBN: 9783957297402