Corporate Debt Overhang and Credit Policy

2020 ◽  
Vol 2020 (2) ◽  
pp. 447-502
Author(s):  
Markus Brunnermeier ◽  
Arvind Krishnamurthy
Keyword(s):  
Corporate Debt ◽  
Credit Policy ◽  
Debt Overhang

Sticky Leverage

2016 ◽  
Vol 106 (12) ◽  
pp. 3800-3828 ◽  
Author(s):  
João Gomes ◽  
Urban Jermann ◽  
Lukas Schmid
Keyword(s):  
Interest Rate ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Debt Maturity ◽  
General Equilibrium Model ◽  
Corporate Debt ◽  
Debt Overhang ◽  
The Real ◽  
Unanticipated Inflation

We develop a tractable general equilibrium model that captures the interplay between nominal long-term corporate debt, inflation, and real aggregates. We show that unanticipated inflation changes the real burden of debt and, more significantly, leads to a debt overhang that distorts future investment and production decisions. For these effects to be both large and very persistent, it is essential that debt maturity exceeds one period. We also show that interest rate rules can help stabilize our economy. (JEL E12, E31, E44, E52, G01, G32, G35)

scholarly journals Zombies at Large? Corporate Debt Overhang and the Macroeconomy

2020 ◽  
Author(s):  
Òscar Jordà ◽  
Martin Kornejew ◽  
Moritz Schularick ◽  
Alan M. Taylor
Keyword(s):  
Corporate Debt ◽  
Debt Overhang

The Costs of Corporate Debt Overhang

2020 ◽  
Author(s):  
Kristian Blickle ◽  
João A. C. Santos
Keyword(s):  
Corporate Debt ◽  
Debt Overhang

scholarly journals Zombies at Large? Corporate Debt Overhang and the Macroeconomy

2020 ◽  
Author(s):  
Òscar Jordà ◽  
Martin Kornejew ◽  
Moritz Schularick ◽  
Alan Taylor
Keyword(s):  
Corporate Debt ◽  
Debt Overhang

scholarly journals Zombies at Large? Corporate Debt Overhang and the Macroeconomy

2021 ◽  
Author(s):  
Òscar Jordà ◽  
◽  
Martin Kornejew ◽  
Moritz Schularick ◽  
Alan Taylor ◽  
...  
Keyword(s):  
Corporate Bonds ◽  
Bank Loans ◽  
Corporate Debt ◽  
Legal Tradition ◽  
Debt Overhang ◽  
Credit Booms ◽  
Debt Renegotiation ◽  
The Past ◽  
Advanced Economies ◽  
Household Credit

What are the macroeconomic consequences of business credit booms? Are they as dangerous as household credit booms? If not, why not? We answer these questions by collecting data on nonfinancial business liabilities (primarily bank loans and corporate bonds) for 17 advanced economies over the past 150 years. Unlike household credit, business credit booms are rarely followed by macroeconomic hangovers. Data on debt renegotiation costs—instrumented by a country’s legal tradition—show that frictions to debt resolution make recessions deeper and longer—an important factor in explaining the differences with household credit booms.

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