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  3. American Economic Review
  4. May 2012
  5. Bubbles and Total Factor Productivity

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Bubbles and Total Factor Productivity

  • Jianjun Miao
  • Pengfei Wang
American Economic Review
vol. 102, no. 3, May 2012
(pp. 82–87)
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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.

Citation

Miao, Jianjun, and Pengfei Wang. 2012. "Bubbles and Total Factor Productivity." American Economic Review, 102 (3): 82–87. DOI: 10.1257/aer.102.3.82

JEL Classification

  • E32 Business Fluctuations; Cycles
  • E23 Macroeconomics: Production
  • E44 Financial Markets and the Macroeconomy
  • G01 Financial Crises
  • O41 One, Two, and Multisector Growth Models