The DOI matches its Crossref record.
Financial Fragility and Economic Performance
Abstract
Financial stability is an important goal of policy, but the relation of financial stability to economic performance and even the meaning of the term itself are poorly understood. This paper explores these issues in a theoretical model. We argue that financial instability, or fragility, occurs when entrepreneurs who want to undertake investment projects have low net worth; the heavy reliance on external finance that this implies causes the agency costs of investment to be high. High agency costs in turn lead to low and inefficient investment. Standard policies for fighting financial fragility can be interpreted as transfers that maintain or increase the net worth of potential borrowers.
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Citations
Cited by
The Financial Accelerator in a Quantitative Business Cycle Framework
Bernanke, B., Gertler, M., & Gilchrist, S. (1998) · National Bureau of Economic Research · doi:10.3386/w6455 · Cited by 4,592
Self-citationCorporate social responsibility and access to finance
Cheng, B., Ioannou, I., & Serafeim, G. (2014) · Strategic Management Journal · doi:10.1002/smj.2131 · Cited by 3,896
Financial Development and Economic Growth: Views and Agenda
Levine, R. (1999) · Policy Research Working Papers · doi:10.1596/1813-9450-1678 · Cited by 2,977
Has Finance Made the World Riskier?
Rajan, R. G. (2006) · European Financial Management · doi:10.1111/j.1468-036x.2006.00330.x · Cited by 913
Gertler, M., & Gilchrist, S. (1993) · The Scandinavian Journal of Economics · doi:10.2307/3440134 · Cited by 733
Self-citation
Metadata
- Authors
- Bernanke, B., & Gertler, M.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 1990-02
- Volume
- 105
- Issue
- 1
- Pages
- 87
- ISSN
- 0033-5533 (ISSN-L)
- OpenAlex
- W2148347284
- Cited by
- 926
- References
- 0
- FWCI
- 33.37
- Type
- journal article
- Language
- en
- Open access
- closed
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- Bernanke, B., & Gertler, M. (1990). Financial Fragility and Economic Performance. The Quarterly Journal of Economics. https://doi.org/10.2307/2937820
Data sources
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.
