[go: up one dir, main page]

  EconPapers    
Economics at your fingertips  
 

Zombies at Large? Corporate Debt Overhang and the Macroeconomy

Oscar Jorda, Martin Kornejew (), Moritz Schularick and Alan Taylor

No 951, Staff Reports from Federal Reserve Bank of New York

Abstract: With business leverage at record levels, the effects of corporate debt overhang on growth and investment have become a prominent concern. In this paper, we study the effects of corporate debt overhang based on long-run cross-country data covering the near-universe of modern business cycles. We show that business credit booms typically do not leave a lasting imprint on the macroeconomy. Quantile local projections indicate that business credit booms do not affect the economy’s tail risks either. Yet in line with theory, we find that the economic costs of corporate debt booms rise when inefficient debt restructuring and liquidation impede the resolution of corporate financial distress and make it more likely that corporate zombies creep along.

Keywords: corporate debt; business cycles; local projections (search for similar items in EconPapers)
JEL-codes: E44 G32 G33 N20 (search for similar items in EconPapers)
Pages: 46
Date: 2020-12-01
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr951.pdf Full text (application/pdf)
https://www.newyorkfed.org/research/staff_reports/sr951.html Summary (text/html)

Related works:
Journal Article: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022) Downloads
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2021) Downloads
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020) Downloads
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020) Downloads
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020) Downloads
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednsr:89124

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Staff Reports from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().

 
Page updated 2024-12-18
Handle: RePEc:fip:fednsr:89124