NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Credit Crunches and Credit Allocation in a Model of Entrepreneurship

Marco Bassetto, Marco Cagetti, Mariacristina De Nardi

NBER Working Paper No. 19296
Issued in August 2013
NBER Program(s):   EFG   PE

We study the effects of credit shocks in a model with heterogeneous entrepreneurs, financing constraints, and a realistic firm size distribution. As entrepreneurial firms can grow only slowly and rely heavily on retained earnings to expand the size of their business in this set-up, we show that, by reducing entrepreneurial firm size and earnings, negative shocks have a very persistent effect on real activity. In determining the speed of recovery from an adverse economic shock, the most important factor is the extent to which the shock erodes entrepreneurial wealth.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19296

Users who downloaded this paper also downloaded these:
Greenlaw, Hamilton, Hooper, and Mishkin w19297 Crunch Time: Fiscal Crises and the Role of Monetary Policy
Woodford w19368 Macroeconomic Analysis without the Rational Expectations Hypothesis
Kerr w19377 U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence
Wang, Wang, and Yang w19319 Optimal Consumption and Savings with Stochastic Income
Cooper and Nikolov w19278 Government Debt and Banking Fragility: The Spreading of Strategic Uncertainty
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us