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Informational Imperfections in the Capital Market and Macro-Economic Fluctuations / Bruce C. Greenwald, Joseph E. Stiglitz, Andrew Weiss.
- Format:
- Book
- Author/Creator:
- Greenwald, Bruce C.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1335.
- NBER working paper series no. w1335
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1984.
- Summary:
- This paper describes the role that informational imperfections in capital markets are likely to play in business cycles. It then developes a simple illustrative model of the impact of adverse selection in the equity market and the way in which this may lead to large fluctuations in the effective cost of capital in response to relatively small demand shocks.
- The model also derives an expression for the cost of equity capital in the presence of adverse selection and provides informational explanations for several widely observed macro-economic phenomena.
- Notes:
- Print version record
- April 1984.
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