I In the first chapter, e build a two-sector (capital and final goods) model with endogenous firm dynamics to study the effects of permanent productivity shocks in the final goods sector. Firms are characterised by idiosyncratic productivity levels and decreasing returns to scale. Shocks are modelled as a sudden improvement of the technology frontier accessed by new entrants, which then gradually spreads to incumbent firms. The shock drives less efficient firms out of the market and unambiguously raises productivity and output in the long run. By contrast, creative destruction is strongly limited by the initial fall in the relative price of capital goods. This latter result is driven by the wealth effect of the shock on consumption dynamics and by the ensuing reduction in savings and in demand for capital goods. The smaller scale of production of this sector is associated with increased efficiency and to a reduced relative price of capital goods. As a result, production costs in the final goods sector, fall and fewer incumbents exit the market. Relative to what would happen in a standard one sector model, we obtain a contraction in the initial employment fall associated with the shock. In the second chapter, We build a business cycle model characterized by endogenous firms dynamic, idiosyncratic productivity levels and by a financial sector. Starting from a set-up \`{a} la Gerlter and Karadi (2011 \cite{gertler2011model}), we extend the financial sector including firms' default and the possibility to roll-over borrowing condition to unproductive firms. We find that a technology improvement discourages debt roll-over, reducing the share of Non-performing loans (NPL) and unproductive incumbent through the entry of new and more productive firms. New entrants, raise market competition and increase interest rates, financial intermediaries incentive to renegotiated debt condition decrease and the same happens to the share of NPLs. Furthermore, an adverse shock to financial intermediaries capital triggers an ever-greening mechanism that increases the share of NPLs in bankers balance sheets and persistently reduces aggregate productivity.

In the first chapter, e build a two-sector (capital and final goods) model with endogenous firm dynamics to study the effects of permanent productivity shocks in the final goods sector. Firms are characterised by idiosyncratic productivity levels and decreasing returns to scale. Shocks are modelled as a sudden improvement of the technology frontier accessed by new entrants, which then gradually spreads to incumbent firms. The shock drives less efficient firms out of the market and unambiguously raises productivity and output in the long run. By contrast, creative destruction is strongly limited by the initial fall in the relative price of capital goods. This latter result is driven by the wealth effect of the shock on consumption dynamics and by the ensuing reduction in savings and in demand for capital goods. The smaller scale of production of this sector is associated with increased efficiency and to a reduced relative price of capital goods. As a result, production costs in the final goods sector, fall and fewer incumbents exit the market. Relative to what would happen in a standard one sector model, we obtain a contraction in the initial employment fall associated with the shock. In the second chapter, We build a business cycle model characterized by endogenous firms dynamic, idiosyncratic productivity levels and by a financial sector. Starting from a set-up \`{a} la Gerlter and Karadi (2011 \cite{gertler2011model}), we extend the financial sector including firms' default and the possibility to roll-over borrowing condition to unproductive firms. We find that a technology improvement discourages debt roll-over, reducing the share of Non-performing loans (NPL) and unproductive incumbent through the entry of new and more productive firms. New entrants, raise market competition and increase interest rates, financial intermediaries incentive to renegotiated debt condition decrease and the same happens to the share of NPLs. Furthermore, an adverse shock to financial intermediaries capital triggers an ever-greening mechanism that increases the share of NPLs in bankers balance sheets and persistently reduces aggregate productivity.

(2019). Sectoral shocks and banking crises in a schumpeterian model of endogenous firm dynamics. (Tesi di dottorato, Università degli Studi di Milano-Bicocca, 2019).

Sectoral shocks and banking crises in a schumpeterian model of endogenous firm dynamics

BARBARO, BIANCA
2019-04-29

Abstract

In the first chapter, e build a two-sector (capital and final goods) model with endogenous firm dynamics to study the effects of permanent productivity shocks in the final goods sector. Firms are characterised by idiosyncratic productivity levels and decreasing returns to scale. Shocks are modelled as a sudden improvement of the technology frontier accessed by new entrants, which then gradually spreads to incumbent firms. The shock drives less efficient firms out of the market and unambiguously raises productivity and output in the long run. By contrast, creative destruction is strongly limited by the initial fall in the relative price of capital goods. This latter result is driven by the wealth effect of the shock on consumption dynamics and by the ensuing reduction in savings and in demand for capital goods. The smaller scale of production of this sector is associated with increased efficiency and to a reduced relative price of capital goods. As a result, production costs in the final goods sector, fall and fewer incumbents exit the market. Relative to what would happen in a standard one sector model, we obtain a contraction in the initial employment fall associated with the shock. In the second chapter, We build a business cycle model characterized by endogenous firms dynamic, idiosyncratic productivity levels and by a financial sector. Starting from a set-up \`{a} la Gerlter and Karadi (2011 \cite{gertler2011model}), we extend the financial sector including firms' default and the possibility to roll-over borrowing condition to unproductive firms. We find that a technology improvement discourages debt roll-over, reducing the share of Non-performing loans (NPL) and unproductive incumbent through the entry of new and more productive firms. New entrants, raise market competition and increase interest rates, financial intermediaries incentive to renegotiated debt condition decrease and the same happens to the share of NPLs. Furthermore, an adverse shock to financial intermediaries capital triggers an ever-greening mechanism that increases the share of NPLs in bankers balance sheets and persistently reduces aggregate productivity.
TIRELLI, PATRIZIO
I In the first chapter, e build a two-sector (capital and final goods) model with endogenous firm dynamics to study the effects of permanent productivity shocks in the final goods sector. Firms are characterised by idiosyncratic productivity levels and decreasing returns to scale. Shocks are modelled as a sudden improvement of the technology frontier accessed by new entrants, which then gradually spreads to incumbent firms. The shock drives less efficient firms out of the market and unambiguously raises productivity and output in the long run. By contrast, creative destruction is strongly limited by the initial fall in the relative price of capital goods. This latter result is driven by the wealth effect of the shock on consumption dynamics and by the ensuing reduction in savings and in demand for capital goods. The smaller scale of production of this sector is associated with increased efficiency and to a reduced relative price of capital goods. As a result, production costs in the final goods sector, fall and fewer incumbents exit the market. Relative to what would happen in a standard one sector model, we obtain a contraction in the initial employment fall associated with the shock. In the second chapter, We build a business cycle model characterized by endogenous firms dynamic, idiosyncratic productivity levels and by a financial sector. Starting from a set-up \`{a} la Gerlter and Karadi (2011 \cite{gertler2011model}), we extend the financial sector including firms' default and the possibility to roll-over borrowing condition to unproductive firms. We find that a technology improvement discourages debt roll-over, reducing the share of Non-performing loans (NPL) and unproductive incumbent through the entry of new and more productive firms. New entrants, raise market competition and increase interest rates, financial intermediaries incentive to renegotiated debt condition decrease and the same happens to the share of NPLs. Furthermore, an adverse shock to financial intermediaries capital triggers an ever-greening mechanism that increases the share of NPLs in bankers balance sheets and persistently reduces aggregate productivity.
firms' dynamic; innovation; NPL; endogenous exit; financial sector
firms' dynamic; innovation; NPL; endogenous exit; financial sector
SECS-P/05 - ECONOMETRIA
English
ECONOMIA - DEFAP - 85R
31
2017/2018
(2019). Sectoral shocks and banking crises in a schumpeterian model of endogenous firm dynamics. (Tesi di dottorato, Università degli Studi di Milano-Bicocca, 2019).
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/241309
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