The DOI matches its DataCite record; 7 of the 7 references it cites were found in a registry or an index.
Agency Costs, Net Worth, And Business Fluctuations
Open accessAbstract
This paper constructs a simple neoclassical model of intrinsic business cycle dynamics in which borrowers' balance sheet positions play an important role. The critical insight is that the agency costs of undertaking physical investments are inversely related to the entrepreneur's/borrower's net worth. As a result, accelerator effects on investment emerge: Strengthened borrower balance sheets resulting from good times expand investment demand, which in turn tends to amplify the upturn; weakened balance sheets in bad times do just the opposite. Further, redistributions or other shocks that affect borrowers' balance sheets (as in a debt-deflation} may have aggregate real effects.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
Moral Hazard and Observability
Holmstrom, B. R. (1979) · The Bell Journal of Economics · doi:10.2307/3003320 · Cited by 8,159
Optimal contracts and competitive markets with costly state verification
Townsend, R. M. (1979) · Journal of Economic Theory · doi:10.1016/0022-0531(79)90031-0 · Cited by 3,204
Theory ahead of business-cycle measurement
Prescott, E. C. (1986) · Carnegie-Rochester Conference Series on Public Policy · doi:10.1016/0167-2231(86)90035-7 · Cited by 1,664
Limited liability contracts between principal and agent
Sappington, D. E. M. (1983) · Journal of Economic Theory · doi:10.1016/0022-0531(83)90120-5 · Cited by 520
The Household Balance Sheet and the Great Depression
Mishkin, F. S. (1978) · The Journal of Economic History · doi:10.1017/s0022050700087167 · Cited by 356
Financial Intermediation, Business Failures, and Real Business Cycles
Williamson, S. D. (1987) · Journal of Political Economy · doi:10.1086/261511 · Cited by 348
Monetary factors in the great depression
Hamilton, J. D. (1987) · Journal of Monetary Economics · doi:10.1016/0304-3932(87)90045-6 · Cited by 280
Cited by
Sorted by citations
Items 401–500 of 1,001
Firm Financing over the Business Cycle
Begenau, J., & Salomão, J. (2018) · Review of Financial Studies · doi:10.1093/rfs/hhy099 · Cited by 143
Macroeconomic Instability and Business Exit: Determinants of Failures and Acquisitions of UK Firms
Bhattacharjee, A., Higson, C., Holly, S., & Kattuman, P. A. (2008) · Economica · doi:10.1111/j.1468-0335.2007.00662.x · Cited by 143
Idiosyncratic production risk, growth and the business cycle
Angeletos, G.-M., & Calvet, L. E. (2006) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2005.05.016 · Cited by 143
The causes and propagation of financial instability: lessons for policy makers
Mishkin, F. S. (1997) · RePEc: Research Papers in Economics · Cited by 142
Accounting for the Great Depression
Chari, V. V., Kehoe, P. J., & McGrattan, E. R. (2002) · American Economic Review · doi:10.1257/000282802320188934 · Cited by 142
Capital market imperfections in a monetary growth model
Boyd, J. H., & Smith, B. D. (1998) · Economic Theory · doi:10.1007/s001990050187 · Cited by 142
Corporate Diversification and Credit Constraints: Real Effects across the Business Cycle
Dimitrov, V., & Tice, S. (2006) · Review of Financial Studies · doi:10.1093/rfs/hhj028 · Cited by 141
Terrones, M. E., Köse, M. A., & Claessens, S. (2011) · IMF Working Paper · doi:10.5089/9781455227037.001 · Cited by 140
International Spillovers and Local Credit Cycles
di Giovanni, J., Kalemli‐Özcan, Ṣ., Ulu, M. F., & Başkaya, Y. S. (2021) · The Review of Economic Studies · doi:10.1093/restud/rdab044 · Cited by 140
Leverage and House-Price Dynamics in U.S. Cities
Lamont, O. A., & Stein, J. C. (1997) · National Bureau of Economic Research · doi:10.3386/w5961 · Cited by 140
Martínez-Miera, D., & Repullo, R. (2017) · Econometrica · doi:10.3982/ecta14057 · Cited by 138
Leveraged network-based financial accelerator
Riccetti, L., Russo, A., & Gallegati, M. (2013) · Journal of Economic Dynamics and Control · doi:10.1016/j.jedc.2013.02.008 · Cited by 133
Two Monetary Tools: Interest Rates and Haircuts
Ashcraft, A. B., Garleanu, N. B., & Pedersen, L. H. (2010) · NBER Macroeconomics Annual · doi:10.1086/657530 · Cited by 138
Aggregate Implications of a Credit Crunch: The Importance of Heterogeneity
Buera, F., & Moll, B. (2015) · American Economic Journal Macroeconomics · doi:10.1257/mac.20130212 · Cited by 138
EUA and sCER phase II price drivers: Unveiling the reasons for the existence of the EUA–sCER spread
Mansanet-Bataller, M., Chevallier, J., Hervé-Mignucci, M., & Alberola, É. (2010) · Energy Policy · doi:10.1016/j.enpol.2010.10.047 · Cited by 152
In Search of "Capital Crunch": Supply Factors Behind the Credit Slowdown in Japan
Woo, D. (2003) · Journal of money credit and banking · doi:10.1353/mcb.2003.0050 · Cited by 138
The Monetary Transmission Mechanism: Some Answers and Further Questions. (Overview)
Kuttner, K. N., & Mosser, P. C. (2002) · Federal Reserve Bank of New York Economic policy review · Cited by 138
Lorenzoni, G. (2007) · National Bureau of Economic Research · doi:10.3386/w13639 · Cited by 138
Gorton, G., & Winton, A. (2002) · National Bureau of Economic Research · doi:10.3386/w8928 · Cited by 149
Rajan, R. G., & Ramcharan, R. (2015) · American Economic Review · doi:10.1257/aer.20120525 · Cited by 137
The external finance premium and the macroeconomy: US post-WWII evidence
Graeve, F. D. (2008) · Journal of Economic Dynamics and Control · doi:10.1016/j.jedc.2008.02.008 · Cited by 137
Analytical Afterthoughts on the Asian Crisis
Krugman, P. (2001) · Springer eBooks · doi:10.1007/978-1-4615-1677-4_19 · Cited by 137
Wealth Effects, Distribution, and the Theory of Organization
Legros, P., & Newman, A. F. (1996) · Journal of Economic Theory · doi:10.1006/jeth.1996.0092 · Cited by 137
How to Solve the Price Puzzle? A Meta‐Analysis
Rusnák, M., Havránek, T., & Horváth, R. (2013) · Journal of money credit and banking · doi:10.1111/j.1538-4616.2012.00561.x · Cited by 131
The Role of Collateralized Household Debt in Macroeconomic Stabilization
Campbell, J. R., & Hercowitz, Z. (2005) · National Bureau of Economic Research · doi:10.3386/w11330 · Cited by 136
Labor and Capital Dynamics Under Financing Frictions
Michaels, R., Page, T. B., & Whited, T. M. (2016) · European Finance Review · doi:10.1093/rof/rfy020 · Cited by 135
Why Does Fast Loan Growth Predict Poor Performance for Banks?
Fahlenbrach, R., Prilmeier, R., & Stulz, R. M. (2016) · Review of Financial Studies · doi:10.1093/rfs/hhx109 · Cited by 145
An empirical analysis of zero-leverage firms: New evidence from the UK
Dang, V. A. (2013) · International Review of Financial Analysis · doi:10.1016/j.irfa.2013.08.007 · Cited by 140
How big is the debt overhang problem?
Moyen, N. (2006) · Journal of Economic Dynamics and Control · doi:10.1016/j.jedc.2005.10.008 · Cited by 135
Cook, D. (2004) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2003.12.002 · Cited by 136
A model of dynamic compensation and capital structure☆
He, Z. (2011) · Journal of Financial Economics · doi:10.1016/j.jfineco.2011.01.005 · Cited by 135
The financial accelerator and the credit channelPreprint
Bernanke, B. (2007) · RePEc: Research Papers in Economics · Cited by 133
Self-citationGorton, G., & Ordoñez, G. L. (2019) · Journal of the European Economic Association · doi:10.1093/jeea/jvy058 · Cited by 132
The Determinants of Bank Credit in Industrialized Countries: Do Property Prices Matter?
Boris Hofmann, B. (2004) · International Finance · doi:10.1111/j.1367-0271.2004.00136.x · Cited by 127
Banking stability, competition, and economic volatility
Fernández, A., González, F., & Suárez, N. (2016) · Journal of Financial Stability · doi:10.1016/j.jfs.2016.01.005 · Cited by 118
Inflation Risk in Corporate Bonds
Kang, J., & PFLUEGER, C. E. (2014) · The Journal of Finance · doi:10.1111/jofi.12195 · Cited by 126
Household Debt Overhang and Transmission of Monetary Policy
Alpanda, S., & Zubairy, S. (2018) · Journal of money credit and banking · doi:10.1111/jmcb.12548 · Cited by 131
Mending the broken link: Heterogeneous bank lending rates and monetary policy pass-through
Altavilla, C., Canova, F., & Ciccarelli, M. (2019) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2019.01.001 · Cited by 131
Does bank lending affect output? Evidence from the U.S. states
Driscoll, J. C. (2004) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2004.01.001 · Cited by 127
The Magnitude and Cyclical Behavior of Financial Market Frictions
Levin, A., Natalucci, F. M., & Zakrajšek, E. (2004) · Finance and Economics Discussion Series · doi:10.17016/feds.2004.70 · Cited by 130
Bank Financing for SMEs – Lessons from the Literature
Beck, T. (2013) · National Institute Economic Review · doi:10.1177/002795011322500105 · Cited by 134
Monetary policy, cash holding and corporate investment: Evidence from China
Yang, X., Han, L., Li, W., Yin, X., & Tian, L. (2017) · China Economic Review · doi:10.1016/j.chieco.2017.09.001 · Cited by 129
Raberto, M., Özel, B., Ponta, L., Teglio, A., & Cincotti, S. (2018) · Journal of Evolutionary Economics · doi:10.1007/s00191-018-0568-2 · Cited by 130
Financial Stability Frameworks and the Role of Central Banks
Nier, E. (2009) · IMF Working Paper · doi:10.2139/ssrn.1378882 · Cited by 130
Asset Bubbles, Endogenous Growth, and Financial Frictions
Hirano, T., & Yanagawa, N. (2016) · The Review of Economic Studies · doi:10.1093/restud/rdw059 · Cited by 130
Hamilton, J. D. (1992) · American Economic Review · Cited by 130
Credit Shocks and Aggregate Fluctuations in an Economy with Production Heterogeneity
Khan, A., & Thomas, J. K. (2011) · National Bureau of Economic Research · doi:10.3386/w17311 · Cited by 130
Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone
Martin, P. J., & Philippon, T. (2017) · American Economic Review · doi:10.1257/aer.20150630 · Cited by 161
The Monetary Transmission Mechanism: Some Answers and Further Questions
Kuttner, K. N., & Mosser, P. C. (2005) · RePEc: Research Papers in Economics · Cited by 129
Asymmetric Information, Corporate Finance, and Investment
Greenwald, B. C. N., & Stiglitz, J. E. (n.d.) · RePEc: Research Papers in Economics · Cited by 129
Why are interest spreads so high in Uganda?
Beck, T., & Hesse, H. (2008) · Journal of Development Economics · doi:10.1016/j.jdeveco.2008.07.004 · Cited by 128
Capital Reallocation and LiquidityPreprint
Rampini, A. A., & Eisfeldt, A. L. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.384982 · Cited by 128
The Role of Debt and Equity Finance Over the Business Cycle
Covas, F. B., & Haan, W. J. D. (2012) · The Economic Journal · doi:10.1111/j.1468-0297.2012.02528.x · Cited by 127
Housing Finance and Real-Estate Booms
Cerutti, E., Dagher, J., & Dell’Ariccia, G. (2015) · IMF staff discussion note · doi:10.5089/9781513571393.006 · Cited by 127
The Structural Determinants of External Vulnerability
Loayza, N., & Raddatz, C. E. (2007) · The World Bank Economic Review · doi:10.1093/wber/lhm018 · Cited by 127
A theory of shortage in socialist economies based on the `soft budget constraint'
Qian, Y. (1994) · American Economic Review · Cited by 127
Gan, J. (2004) · Journal of Financial Economics · doi:10.1016/j.jfineco.2003.07.004 · Cited by 127
The Deposits Channel of Monetary Policy
Drechsler, I., Savov, A., & Schnabl, P. (2016) · National Bureau of Economic Research · doi:10.3386/w22152 · Cited by 141
Macro Risk Premium and Intermediary Balance Sheet Quantities
Adrian, T., Moench, E., & Shin, H. S. (2010) · IMF Economic Review · doi:10.1057/imfer.2010.5 · Cited by 126
Optimal Monetary Policy in a Model with Agency Costs
Carlstrom, C. T., Fuerst, T. S., & Paustian, M. O. (2010) · Journal of money credit and banking · doi:10.1111/j.1538-4616.2010.00329.x · Cited by 126
Credit Booms and Lending Standards
Dell’Ariccia, G., Laeven, L. A., & Igan, D. O. (2008) · IMF Working Paper · doi:10.5089/9781451869675.001 · Cited by 126
Wholesale Banking and Bank Runs in Macroeconomic Modeling of Financial Crises
Gertler, M. L., Kiyotaki, N., & Prestipino, A. (2016) · International Finance Discussion Paper · doi:10.17016/ifdp.2016.1156 · Cited by 126
Self-citationLiquidity and Financial CyclesPreprint
Adrian, T., & Shin, H. S. (2008) · SSRN Electronic Journal · doi:10.2139/ssrn.1165583 · Cited by 126
External Constraints on Monetary Policy and the Financial Accelerator
Gertler, M. L., Gilchrist, S., & Natalucci, F. M. (2003) · National Bureau of Economic Research · doi:10.3386/w10128 · Cited by 128
Self-citationTariffs and aggregate economic activity: Lessons from the Great Depression
Crucini, M. J., & Kahn, J. (1996) · Journal of Monetary Economics · doi:10.1016/s0304-3932(96)01298-6 · Cited by 125
Value creating stock manipulation: feedback effect of stock prices on firm value
Khanna, N., & Sonti, R. (2004) · Journal of Financial Markets · doi:10.1016/j.finmar.2003.11.004 · Cited by 126
Bank lending and commercial property cycles: Some cross-country evidence
Davis, E. P., & Zhu, H. (2010) · Journal of International Money and Finance · doi:10.1016/j.jimonfin.2010.06.005 · Cited by 179
Sentiments, financial markets, and macroeconomic fluctuations
Benhabib, J., Liu, X., & Pengfei Wang, Z. (2016) · Journal of Financial Economics · doi:10.1016/j.jfineco.2016.01.008 · Cited by 126
The Interaction between Mortgage Financing and Housing Prices in Greece
Brissimis, S. N., & Vlassopoulos, T. (2008) · The Journal of Real Estate Finance and Economics · doi:10.1007/s11146-008-9109-3 · Cited by 124
Does short selling affect a firm's financial constraints?
Meng, Q., Li, X., Chan, K. C., & Gao, S. (2019) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2019.101531 · Cited by 122
Bubbles, Financial Crises, and Systemic Risk
Brunnermeier, M. K., & Oehmke, M. (2012) · National Bureau of Economic Research · doi:10.3386/w18398 · Cited by 124
Structural Reforms and Economic Performance in Advanced and Developing Countries
Ostry, J., Prati, A., & Spilimbergo, A. (2009) · International Monetary Fund eBooks · doi:10.5089/9781589068186.084 · Cited by 123
Das, S. B. (2011) · ISEAS Publishing eBooks · doi:10.1355/9789814311694-019 · Cited by 124
Feedback Effects and Asset Prices
Ozdenoren, E., & Yuan, K. Z. (2008) · The Journal of Finance · doi:10.1111/j.1540-6261.2008.01378.x · Cited by 115
Family ownership, financing constraints and investment decisions
Andrés, C. (2011) · Applied Financial Economics · doi:10.1080/09603107.2011.589805 · Cited by 122
Credit market frictions and the allocation of resources over the business cycle
Barlevy, G. (2003) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2002.11.001 · Cited by 122
Banks, Liquidity Management and Monetary Policy
Bianchi, J., & Bigio, S. (2014) · National Bureau of Economic Research · doi:10.3386/w20490 · Cited by 119
Risk-based capital standards, deposit insurance, and procyclicality
Pennacchi, G. (2005) · Journal of Financial Intermediation · doi:10.1016/j.jfi.2004.09.001 · Cited by 121
Credit crunches and credit allocation in a model of entrepreneurship
Bassetto, M., Cagetti, M., & Nardi, M. D. (2014) · Review of Economic Dynamics · doi:10.1016/j.red.2014.08.003 · Cited by 120
Homeowner Borrowing and Housing Collateral: New Evidence from Expiring Price Controls
DeFusco, A. (2017) · The Journal of Finance · doi:10.1111/jofi.12602 · Cited by 118
The Real Effects of Liquidity During the Financial Crisis: Evidence from Automobiles
Benmelech, E., Meisenzahl, R. R., & Ramcharan, R. (2014) · The Quarterly Journal of Economics · doi:10.1093/qje/qjw031 · Cited by 130
Financial Structure, Macroeconomic Stability and Monetary Policy
Cecchetti, S. G., & Krause, S. (2001) · National Bureau of Economic Research · doi:10.3386/w8354 · Cited by 122
Capital regulation and credit fluctuations
Gersbach, H., & Rochet, J.-C. M. (2017) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2017.05.008 · Cited by 119
Collateral Spread and Financial Development
Liberti, J. M., & Mian, A. (2008) · The Journal of Finance · doi:10.1111/j.1540-6261.2009.01526.x · Cited by 114
Trade Credit, Bank Credit, and Flight to Quality: Evidence from French SMEs
Psillaki, M., & Eleftheriou, K. (2014) · Journal of Small Business Management · doi:10.1111/jsbm.12106 · Cited by 121
Dow, S., & Fuentes, C. J. R. (1997) · Regional Studies · doi:10.1080/00343409750130029 · Cited by 118
Board gender diversity, power, and bank risk taking
Abou‐El‐Sood, H. (2021) · International Review of Financial Analysis · doi:10.1016/j.irfa.2021.101733 · Cited by 118
A model of slow recoveries from financial crises
Queraltó, A. (2019) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2019.03.008 · Cited by 118
Bank concentration and financial constraints on firm-level investment in Europe
Ratti, R. A., Lee, S., & Seol, Y. (2008) · Journal of Banking & Finance · doi:10.1016/j.jbankfin.2008.07.001 · Cited by 117
Dawid, H., & Gatti, D. D. (2018) · Handbook of computational economics · doi:10.1016/bs.hescom.2018.02.006 · Cited by 117
Liu, Z., Li, W., Chen, H., & Liu, H. (2020) · Corporate Social Responsibility and Environmental Management · doi:10.1002/csr.2073 · Cited by 117
Aggregate external financing and savings waves
Eisfeldt, A. L., & Muir, T. (2016) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2016.10.002 · Cited by 116
Firm Size and Monetary Policy Transmission — Evidence from German Business Survey Data
Ehrmann, M. (2005) · Physica-Verlag eBooks · doi:10.1007/3-7908-1605-1_7 · Cited by 116
Networks and the Macroeconomy: An Empirical Exploration
Acemoğlu, D., Akcigit, U., & Kerr, W. R. (2015) · National Bureau of Economic Research · doi:10.3386/w21344 · Cited by 116
Capital adequacy and lending and deposit behaviors of conventional and Islamic banks
Karim, M. A., Hassan, M. K., Hassan, T., & Mohamad, S. (2013) · Pacific-Basin Finance Journal · doi:10.1016/j.pacfin.2013.11.002 · Cited by 115
Cash flow, investment, and Keynes–Minsky cycles
Fazzari, S. M., Ferri, P., & Greenberg, E. (2006) · Journal of Economic Behavior & Organization · doi:10.1016/j.jebo.2005.11.007 · Cited by 115
Can Monetary Policy Affect the Real Economy?Preprint
Arestis, P., & Sawyer, M. (2002) · SSRN Electronic Journal · doi:10.2139/ssrn.335620 · Cited by 119
Asymmetric adjustment toward optimal capital structure: Evidence from a crisis
Dang, V. A., Kim, M., & Shin, Y. (2014) · International Review of Financial Analysis · doi:10.1016/j.irfa.2014.02.013 · Cited by 114
Basel III: Effects of capital and liquidity regulations on European bank lending
Roulet, C. (2017) · Journal of Economics and Business · doi:10.1016/j.jeconbus.2017.10.001 · Cited by 132
What Is the Effect of Financial Stress on Economic Activity
Davig, T. A., & Hakkio, C. S. (2010) · RePEc: Research Papers in Economics · Cited by 114
Metadata
- Authors
- Bernanke, B., Gertler, M., Bernanke, B., & Gertler, M.
- Venue
- Unknown
- Publisher
- Unknown
- Published
- 1988
- Volume
- 79
- Issue
- 1
- Pages
- 14-31
- OpenAlex
- W1933529014
- Cited by
- 4,386
- References
- 7
- Citations by year
- 2026: 8 · 2025: 68 · 2024: 98 · 2023: 143 · 2022: 125 · 2021: 181 · 2020: 222 · 2019: 144 · 2018: 176 · 2017: 175 · 2016: 192 · 2015: 219 · 2014: 256 · 2013: 223 · 2012: 248
- FWCI
- 32.21
- Type
- journal article
- Language
- en
- Open access
- green
- ageconsearch.umn.edu
- Locations
- AgEcon Search (University of Minnesota, USA) (submittedVersion)
- American Economic Review (submittedVersion)
- AgEcon Search (University of Minnesota, USA)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Keywords
- agency costs, net worth, business cycles, debt deflation, investment demand, financial constraints
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
