The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
The Finance Uncertainty Multiplier
Open accessAbstract
We show how real and financial frictions amplify, prolong, and propagate the negative impact of uncertainty shocks. We use a novel instrumentation strategy to address endogeneity in estimating the impact of uncertainty by exploiting differential firm exposure to exchange rate, policy, and energy price volatility. We show that financially constrained firms cut investment more than unconstrained firms following an uncertainty shock. We then build a general equilibrium heterogeneous firms model with real and financial frictions, finding that financial frictions (i) amplify uncertainty shocks by doubling their impact on output; (ii) increase persistence by doubling the duration of the drop; and (iii) propagate uncertainty shocks by spreading their impact onto financial variables.
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Citations
Cites
On Persistence in Mutual Fund Performance
Carhart, M. M. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb03808.x · Cited by 17,283
Metadata
- Authors
- Alfaro, I., Bloom, N., & Lin, X.
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 2024-02-01
- Volume
- 132
- Issue
- 2
- Pages
- 577-615
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W4380563898
- Cited by
- 178
- References
- 1
- FWCI
- 62.51
- Type
- journal article
- Language
- en
- Open access
- hybrid
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- Alfaro, I., Bloom, N., & Lin, X. (2024). The Finance Uncertainty Multiplier. Journal of Political Economy. https://doi.org/10.1086/726230
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
