American Economic Review Vol. 102 No. 3 2012

Bubbles and Total Factor Productivity

Jianjun Miao¹; Pengfei Wang²

¹ Department of Economics, Boston University, 270 Bay State Road, Boston, MA 02215, CEMA, Central University of Finance and Economics, and AFR, Zhejiang University, China. · ² Department of Economics, Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong.

Abstract

This paper presents an infinite-horizon model of production economies in which firms face idiosyncratic productivity shocks and are subject to endogenous credit constraints. Credit-driven stock price bubbles can arise which can relax credit constraints and reallocate capital more efficiently among firms. The collapse of bubbles causes a fall of total factor productivity.

DOI

10.1257/aer.102.3.82

Volume

102

Issue

3

Pages

82-87

Language

en

Sources

bibtex:phds-export.bib crossref openalex

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓