@article{Real-financial:1628,
      recid = {1628},
      author = {Takamura, Tamon},
      title = {Real-financial Linkages through Loan Default and Bank  Capital},
      address = {2013},
      pages = {1 online resource (iii, 55 pages)},
      abstract = {Many studies in macroeconomics argue that financial  frictions do not amplify the impacts of real shocks. This  finding is based on models without endogenous default on  loans and bank capital. Using a model featuring endogenous  interactions between firm default and bank capital, this  paper revisits the propagation mechanisms of real and  financial shocks. The model, calibrated to the US economy,  shows that real shocks translate into a financial problem  and cause persistent business cycle fluctuations through  countercyclical firm default and interest-rate spread.  Consistent with the previous studies, financial shocks lead  the economy into booms and recessions, notably during the  US financial crisis. Capital injections to banks through  the Troubled Asset Relief Program were an effective policy  response for mitigating the vicious cycle between loan  default and interest-rate spread.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1628},
      doi = {https://doi.org/10.34989/swp-2013-3},
}