TY  - JOUR
AU  - Jermann,Urban
AU  - Quadrini,Vincenzo
TI  - Financial Innovations and Macroeconomic Volatility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12308
PY  - 2006
Y2  - June 2006
UR  - http://www.nber.org/papers/w12308
L1  - http://www.nber.org/papers/w12308.pdf
N1  - Author contact info:
Urban Jermann
Finance Department
Wharton School of the University of Pennsylvania
3620 Locust Walk
Philadelphia, PA  19104
Tel: 215/898-4184
Fax: 215/898-6200
E-Mail: jermann@wharton.upenn.edu

Vincenzo Quadrini
Department of Finance and Business Economics
Marshall School of Business
University of Southern California
701 Exposition Boulevard
Los Angeles, CA 90089
Tel: 213/740-6521
Fax: 213/740-6650
E-Mail: quadrini@usc.edu
M2  - featured in NBER digest on 2006-06-19
AB  - The volatility of US business cycles has declined during the last two decades. During the same period the financial structure of firms has become more volatile. In this paper we develop a model in which financial factors play a key role in generating economic fluctuations. Innovations in financial markets allow for greater financial flexibility and generate a lower volatility of output together with a higher volatility in the financial structure of firms.
ER  -