Agency Costs, Net Worth, and Business Fluctuations: A Computable General Equilibrium Analysis
This paper develops a computable general equilibrium model in which endogenous agency costs can potentially alter business-cycle dynamics. A principal conclusion is that the agency-cost model replicates the empirical fact that output growth displays positive autocorrelation at short horizons. This h...
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| Veröffentlicht in: | The American economic review 1997-12, Vol.87 (5), p.893-910 |
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| creator | Carlstrom, Charles T. Fuerst, Timothy S. |
| description | This paper develops a computable general equilibrium model in which endogenous agency costs can potentially alter business-cycle dynamics. A principal conclusion is that the agency-cost model replicates the empirical fact that output growth displays positive autocorrelation at short horizons. This hump-shaped output behavior arises because households delay their investment decisions until agency costs are at their lowest--a point in time several periods after the initial shock. |
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A principal conclusion is that the agency-cost model replicates the empirical fact that output growth displays positive autocorrelation at short horizons. This hump-shaped output behavior arises because households delay their investment decisions until agency costs are at their lowest--a point in time several periods after the initial shock.</description><identifier>ISSN: 0002-8282</identifier><identifier>EISSN: 1944-7981</identifier><identifier>CODEN: AENRAA</identifier><language>eng</language><publisher>Menasha, Wis: American Economic Association</publisher><subject>Agency theory ; Bankruptcy ; Borrowing ; Business cycles ; Capital investments ; Consumption ; Costs ; Economic costs ; Economic models ; Economic theory ; Entrepreneurs ; Equilibrium ; Equity ; Financial investments ; Household consumption ; Households ; Modeling ; Moral hazard ; Net worth ; Productivity ; Random variables ; Roles ; Studies ; Supply curves</subject><ispartof>The American economic review, 1997-12, Vol.87 (5), p.893-910</ispartof><rights>Copyright 1997 American Economic Association</rights><rights>Copyright American Economic Association Dec 1997</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/2951331$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/2951331$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,776,780,799,27846,57992,58225</link.rule.ids></links><search><creatorcontrib>Carlstrom, Charles T.</creatorcontrib><creatorcontrib>Fuerst, Timothy S.</creatorcontrib><title>Agency Costs, Net Worth, and Business Fluctuations: A Computable General Equilibrium Analysis</title><title>The American economic review</title><description>This paper develops a computable general equilibrium model in which endogenous agency costs can potentially alter business-cycle dynamics. A principal conclusion is that the agency-cost model replicates the empirical fact that output growth displays positive autocorrelation at short horizons. This hump-shaped output behavior arises because households delay their investment decisions until agency costs are at their lowest--a point in time several periods after the initial shock.</description><subject>Agency theory</subject><subject>Bankruptcy</subject><subject>Borrowing</subject><subject>Business cycles</subject><subject>Capital investments</subject><subject>Consumption</subject><subject>Costs</subject><subject>Economic costs</subject><subject>Economic models</subject><subject>Economic theory</subject><subject>Entrepreneurs</subject><subject>Equilibrium</subject><subject>Equity</subject><subject>Financial investments</subject><subject>Household consumption</subject><subject>Households</subject><subject>Modeling</subject><subject>Moral hazard</subject><subject>Net worth</subject><subject>Productivity</subject><subject>Random variables</subject><subject>Roles</subject><subject>Studies</subject><subject>Supply 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computable general equilibrium model in which endogenous agency costs can potentially alter business-cycle dynamics. A principal conclusion is that the agency-cost model replicates the empirical fact that output growth displays positive autocorrelation at short horizons. This hump-shaped output behavior arises because households delay their investment decisions until agency costs are at their lowest--a point in time several periods after the initial shock.</abstract><cop>Menasha, Wis</cop><pub>American Economic Association</pub><tpages>18</tpages></addata></record> |
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| identifier | ISSN: 0002-8282 |
| ispartof | The American economic review, 1997-12, Vol.87 (5), p.893-910 |
| issn | 0002-8282 1944-7981 |
| language | eng |
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| source | Jstor Complete Legacy; Periodicals Index Online; EBSCOhost Business Source Complete |
| subjects | Agency theory Bankruptcy Borrowing Business cycles Capital investments Consumption Costs Economic costs Economic models Economic theory Entrepreneurs Equilibrium Equity Financial investments Household consumption Households Modeling Moral hazard Net worth Productivity Random variables Roles Studies Supply curves |
| title | Agency Costs, Net Worth, and Business Fluctuations: A Computable General Equilibrium Analysis |
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