Leasing as a Mitigation of Financial Accelerator Effects
In: Review of Finance, Forthcoming
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In: Review of Finance, Forthcoming
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In: IREF-D-21-00892
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This paper extends the classical Samuelson multiplier-accelerator model for national economy. Actually, this new modeling structure removes the basic shortcoming of the original model producing stable business cycles when realistic values of the parameters (multiplier, accelerator) are entered into the system of equations. Under this new approach, we introduce some kind of randomness and memory into the system. We assume that consumption, private investment and governmental expenditure depend upon the national income values of the last n (n 1) years and further assume that multiplier and accelerator factors are stochastic variables. Then stochastic delayed difference equations of higher order are employed to describe the model, while the respective solutions of higher order polynomials for the expectation of national income variables correspond to the typical observed business cycles of real economy. Stability and controllability conditions are investigated while numerical examples provide further insight and better understanding as regards the control actions, system design, and produced business cycles.
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peer-reviewed ; This paper extends the classical Samuelson multiplier–accelerator model for national economy. Actually, this new modeling structure removes the basic shortcoming of the original model producing stable business cycles when realistic values of the parameters (multiplier, accelerator) are entered into the system of equations. Under this new approach, we introduce some kind of randomness and memory into the system. We assume that consumption, private investment and governmental expenditure depend upon the national income values of the last n (n > 1) years and further assume that multiplier and accelerator factors are stochastic variables. Then stochastic delayed difference equations of higher order are employed to describe the model, while the respective solutions of higher order polynomials for the expectation of national income variables correspond to the typical observed business cycles of real economy. Stability and controllability conditions are investigated while numerical examples provide further insight and better understanding as regards the control actions, system design, and produced business cycles.
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Abstract. This paper revisits the standard multiplier-accelerator model, as advanced by Samuelson. While borrowing on the main assumptions of the multiplier-accelerator, we check the validity of Keynesian theory. Using higher-order difference equations and advanced-level mathematical techniques we solve the tax-augmented multiplier-accelerator model, as well as the open economy one. We find that the values of equilibrium national income are identical to the simple national-income model in the absence of the accelerator. We solve the simple multiplier-accelerator model both in present terms and withprolonged consumption. We solve for equilibrium consumption, tax, and imports which are unaffected by the accelerator. All results conform to Keynesian theory where investment, government spending and exports have a favorable multiplying effect on national income through their respective multipliers. The accelerator coefficient affects neither those multipliers, nor the income and the non-income tax multipliers. Expanding the multiplier-accelerator by the volume of foreign trade, taxation or both does not change the values of Keynesian variables. Adding an accelerator leaves optimal values unaffected but, more importantly, reinforces Keynesian theory.Keywords. Multiplier, Accelerator, Open economy, Difference equations, Keynesian national-income model, Tax multiplier, Exports multiplier.JEL. E12, C02, E21, E22.
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In: Progress in nuclear energy: the international review journal covering all aspects of nuclear energy, Band 116, S. 158-167
ISSN: 0149-1970
Entrepreneurial firms in their early stages cannot finance their own capital sufficiently; hence, external investment is crucial for their survival. Angels, venture capital, and governmental support have played key roles in entrepreneurial financing. Accelerators, a new type of early-stage investor, have been rapidly growing in recent years, and have attracted strong attention. They provide financial support to entrepreneurial firms in their early stages along with mentorship, education, and networking services. However, the advantages of accelerators over existing funding avenues have yet to be proven. Therefore, this study analyzes the behavior and performance of accelerators, angels, and venture capital. We used 30,523 investment data regarding accelerators, angels, and venture capital from the CrunchBase database. By conducting multiple regression and survival analyses, we found that the performance of accelerators differs from that of venture capital, but is similar to that of angels. While accelerators' investees perform well post funding, venture capitals' investees perform well in terms of survivability. This study empirically verifies accelerator-related qualitative research. Additionally, we believe our results will contribute to future accelerator-related research and policy.
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In: JEDC-D-22-00331
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In: IREF-D-23-00456
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In: JOBR-D-21-05128
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In: The economic journal: the journal of the Royal Economic Society, Band 131, Heft 636, S. 1620-1642
ISSN: 1468-0297
AbstractThis article studies the effect of liquidity crises in short-term debt markets in a dynamic general equilibrium framework. Creditors (retail banks) receive imperfect signals regarding the profitability of borrowers (wholesale banks) and, based on these signals and their beliefs about other creditors' actions, choose whether to roll over funding, or not. The unco-ordinated actions of creditors cause a suboptimal incidence of rollover, generating an illiquidity premium. Leverage magnifies this co-ordination inefficiency. Illiquidity shocks in credit markets result in sharp contractions in output. Policy responses are analysed.
In this paper we consider a closed economy and using the multiplier – accelerator principle we develop a simple dynamic New Keynesian type model in our effort to determine the time paths of income, actual and expected inflation towards their long – run equilibrium values. The equilibrium values of actual and expected inflation are proved to be affected by government expenditures and the growth rate nominal money supply. Assuming that the Central Bank is interested in stability of real stock of money supply, we specify the rule of determination of the growth rate in nominal money supply. The use of this rule guarantees the equality between inflation and the growth rate of nominal money supply and permits Central Bank to offset the effects of an expansionary fiscal policy on the real stock of money. The theoretic conclusions of our analysis are affirmed by the simulation results presented in the fourth section of our paper.
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In: IRA-international journal of management & social sciences, Band 9, Heft 3, S. 86
ISSN: 2455-2267
The paper proposes an approach to the description of macroeconomic phenomena, which takes into account the effects of fading memory. The standard notions of the accelerator and the multiplier are very limited, since the memory of economic agents is neglected. We consider the methods to describe the economic processes with memory, which is characterized by the fading of a power-law type. Using the mathematical tools of derivatives and integrals of non-integer orders, we suggest a generalization of the concept of the accelerator and multiplier. We derive the equations of the accelerator with memory and the multiplier with memory, which take into account the changes of endogenous and exogenous variables on a finite time interval. We prove the duality of the concepts of the multiplier with memory and the accelerator with memory. The proposed generalization includes the standard concepts of the accelerator and the multiplier as special cases. In addition these generalizations provide a range of intermediate characteristics to take into account the memory effects in macroeconomic models.
In: Progress in nuclear energy: the international review journal covering all aspects of nuclear energy, Band 83, S. 419-426
ISSN: 0149-1970
We analyze the determinants of the corporate interest rates and the financial accelerator in the Czech Republic. Using a unique panel of 448 Czech firms from 1996 to 2002, we find that selected balance sheet indicators influence significantly the firm-specific interest rates. In particular, debt structure and cash flow have significant effects on interest rates, while indicators on collateral play no significant role. We find evidence that monetary policy has stronger effects on smaller firms than on medium and larger firms. Finally, we find no asymmetric effects in the monetary policy over the business cycle.
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