Labor leverage, coordination failures, and aggregate risk

• 成果类型: Article
• 署名作者: Bouvard, Matthieu; de Motta, Adolfo
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; McGill University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.036
• 发表日期: 2021
• 页码: 1229-1252
• 关键词: Operating leverage; Labor leverage; coordination failure; Aggregate risk

摘要

This paper studies an economy in which demand spillovers make firms' production decisions strategic complements. Firms choose their operating leverage trading off higher fixed costs for lower variable costs. Operating leverage governs firms' exposures to an aggregate labor productivity shock. In equilibrium, firms exhibit excessive operating leverage because they do not internalize that an economy with higher aggregate operating leverage is more likely to fall into a recession following a negative productivity shock. Welfare losses coming from firms' failure to coordinate production are amplified by suboptimal risk-taking, which magnifies the impact of productivity shocks onto aggregate output. (c) 2021 Elsevier B.V. All rights reserved.