Long-Term Finance and Investment with Frictional Asset Markets

• 成果类型: Article
• 署名作者: Kozlowski, Julian
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - St. Louis
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20190353
• 发表日期: 2021
• 页码: 411-448
• 关键词: debt maturity; monetary-policy; corporate-debt; liquidity; COSTS; RISK; determinants; economies; spreads; IMPACT

摘要

Trading frictions in financial markets affect more long-term than short-term bonds, generating an upward-sloping yield curve. Long-term financing is more expensive in economies with higher trading frictions so firms choose to borrow and invest in shorter horizons and lower productivity projects. The theory guides a new identification of the slope of liquidity spread in the data. We measure and calibrate the model for the United States, and counterfactual exercises suggest that variations in trading frictions can have significant effects on maturity choices and investment. A policy intervention improves liquidity, reduces long-term financial costs, and promotes investment in longer-term projects.