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The Financial Accelerator from a Business Cycle Accounting Perspective

Author

Listed:
  • Antón Sarabia Arturo
Abstract
In a recent paper, Gertler, Gilchrist and Natalucci (2006) report that the financial accelerator mechanism may account for about half of the fall in output and investment observed during the Korean crisis of 1997-1998. Using the business cycle accounting method of Chari, Kehoe and McGrattan (2006a), this paper finds that such a result is very sensitive to the value of Tobin's q elasticity. The implication is that the adjustment cost function may be crucial in terms of the relative importance of distortions for explaining business cycle fluctuations.

Suggested Citation

  • Antón Sarabia Arturo, 2007. "The Financial Accelerator from a Business Cycle Accounting Perspective," Working Papers 2007-06, Banco de México.
    • Handle: RePEc:bdm:wpaper:2007-06
    as

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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7BF8B429DD-48F1-E17B-E0B6-703C94492D6D%7D.pdf
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    References listed on IDEAS

    as
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    7. Sherry L. Kiser & Jahyeong Koo, 2001. "Recovery from a financial crisis: the case of South Korea," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 24-36.
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    More about this item

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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