Data and Code for: Flexibility and Frictions in Multisector Models
Principal Investigator(s): View help for Principal Investigator(s) Jorge Miranda-Pinto, University of Queensland; Eric Young, University of Virginia
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| Data_and_codes_for_flexibility_and_frictions_multisector_models | 08/24/2022 12:04:PM |
Project Citation:
Miranda-Pinto, Jorge, and Young, Eric. Data and Code for: Flexibility and Frictions in Multisector Models. Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-09-13. https://doi.org/10.3886/E178461V1
Project Description
Summary:
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We show that during the Great Recession, more-flexible sectors paid lower sectoral bond spreads. We rationalize this fact with a model with input-output linkages, heterogeneous elasticities, and binding working capital constraints in the use of intermediates. We show that the difference in flexibility between upstream and downstream sectors is key for determining the role of input-output linkages in amplifying or mitigating distortions. Calibrating the model to the US economy, we find that our sectoral elasticity estimates amplify distortions by a factor of 1.7 compared to the Cobb-Douglas case, and generate an input-output multiplier 1.2 times the homogeneous elasticity case.
Scope of Project
Subject Terms:
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elasticity of substitution;
credit spreads;
working capital constraints
JEL Classification:
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E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
Geographic Coverage:
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United States
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