Replication data for: Sticky Leverage

Name	File Type	Size	Last Modified
20130952_data			10/12/2019 12:56:AM
LICENSE.txt	text/plain	14.6 KB	10/11/2019 08:56:PM

Project Citation:

Gomes, João, Jermann, Urban, and Schmid, Lukas. Replication data for: Sticky Leverage. Nashville, TN: American Economic Association [publisher], 2016. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E112936V1

Project Description

Summary: We develop a tractable general equilibrium model that captures the interplay between nominal long-term corporate debt, inflation, and real aggregates. We show that unanticipated inflation changes the real burden of debt and, more significantly, leads to a debt overhang that distorts future investment and production decisions. For these effects to be both large and very persistent, it is essential that debt maturity exceeds one period. We also show that interest rate rules can help stabilize our economy.

Scope of Project

JEL Classification:
      E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
      E31 Price Level; Inflation; Deflation
      E44 Financial Markets and the Macroeconomy
      E52 Monetary Policy
      G01 Financial Crises
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      G35 Payout Policy

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Published Versions

V1 [2019-10-12]

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DDI 2.5

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