Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
967488 | Journal of Monetary Economics | 2011 | 15 Pages |
Abstract
⺠We build a general equilibrium economy with corporate default. ⺠Corporation issues long-term debt with a fixed nominal coupon. ⺠Corporate default decisions depend on monetary policy through its impact on expected inflation. ⺠Deadweight bankruptcy costs provide an important role for monetary policy. ⺠A debt-deflationary spiral results when there are real costs of financial distress.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Harjoat S. Bhamra, Adlai J. Fisher, Lars-Alexander Kuehn,