Author
Juan M. Sánchez
Other affiliations: University of Rochester, Federal Reserve System, National University of La Plata
Bio: Juan M. Sánchez is an academic researcher from Federal Reserve Bank of St. Louis. The author has contributed to research in topics: Debt & Recession. The author has an hindex of 21, co-authored 110 publications receiving 1512 citations. Previous affiliations of Juan M. Sánchez include University of Rochester & Federal Reserve System.
Topics: Debt, Recession, Unemployment, Intermediation, Bankruptcy
Papers published on a yearly basis
Papers
More filters
Posted Content•
TL;DR: In this paper, the authors focused on credit flows among publicly traded firms at the national level and also examined a sample of firms headquartered in the Eighth District and found that the reallocation of financial resources (e.g., credit) has been low in the current recovery compared with what happened in past recoveries.
Abstract: As stated by University of Maryland economics professor John Haltiwanger, the sorting of successful business endeavors from unsuccessful ones is a central and necessary part of our market economy, and it is essential that the public and policymakers understand this process.1 Our previous studies show that the reallocation of employment has been low in the current recovery compared with what happened in past recoveries.2 Business Employment Dynamics data from the Bureau of Labor Statistics reveal that employment turnover was significantly lower following the Great Recession than following the former two recessions, in 2001 and 1990. The same trend appears in the creation of startups.3 By the first quarter of 2010, business closings declined to prerecession levels for both the nation and the Eighth District, but business formations were slower to recover. Although these studies analyze the behavior of the labor market and small firms (those entering and exiting), little is known about reallocation of resources among larger, more-established firms. This article concentrates on credit flows among publicly traded firms at the national level and also examines a sample of firms headquartered in the Eighth District. Studying the reallocation of financial resources (e.g., credit) is important: Economists Jith Jayaratne and Philip Strahan argued in their 1996 study that the intrastate branching reform in the United States played an important role in economic growth by improving the allocation of capital.4 To understand the definition of credit reallocation, we need to introduce two related concepts: credit creation and destruction.5 Credit creation is the sum of
TL;DR: Firms started during recessions, especially those started in 2008, have grown less during the first 3 years of their life than those starting in non-recession years as mentioned in this paper.
Abstract: Firms started during recessions, especially those started in 2008, have grown less during the first 3 years of their life than those started in non-recession years.
01 Jan 2010
TL;DR: In this article, a costly state verifier-cation model of financial intermediation is presented to address the question of how important financial development is for economic development, and the model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the …rm-size distribution for the years 1974 and 2004.
Abstract: How important is …nancial development for economic development? A costly state veri…cation model of …nancial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the …rm-size distribution for the years 1974 and 2004. It is then used to study the international data, using cross-country interest-rate spreads and per-capita GDP. The analysis suggests a country like Uganda could increase its output by 140 to 180% if it could adopt the world’s best practice in the …nancial sector. Still, this amounts to only 34 to 40% of the gap between Uganda’s potential and actual output.
01 Jan 2022
TL;DR: In this paper , the authors used an endogenous growth model to study how the improvements in financing for innovative start-ups brought by venture capital (VC) affect firm innovation and growth, and showed that better screening and development of projects by VC investors leads to higher aggregate productivity growth.
Abstract: This article uses an endogenous growth model to study how the improvements in financing for innovative start-ups brought by venture capital (VC) affect firm innovation and growth. Partial equilibrium results show how lending con-tracts change as financing efficiency improves, while general equilibrium results demonstrate that better screening and development of projects by VC investors leads to higher aggregate productivity growth.
TL;DR: This paper studied a sovereign default model with domestic fiscal and monetary policies to understand Argentina's experience during the 2000s commodity boom (2005-2017), following the default of 2001, and found that despite exceptionally favorable terms of trade, a rise in government spending led to higher taxation, inflation and currency depreciation, and lower output.
Abstract: Debt crises in emerging markets have been linked to large fiscal deficits, high inflation rates, and large devaluations. This article studies a sovereign default model with domestic fiscal and monetary policies to understand Argentina’s experience during the 2000s commodity boom (2005–2017), following the default of 2001. The model suggests that domestic policies played a critical role in Argentina’s poor economic performance. Despite exceptionally favorable terms of trade, a rise in government spending led to higher taxation, inflation and currency depreciation, and lower output. Economic performance would have been worse had Argentina followed a strict, rather than accommodative, monetary policy without curbing its expansionary fiscal policy. Finally, limited access to international credit markets during this episode did not appear to play a significant role.
Cited by
More filters
TL;DR: In this paper, the authors formulate a version of the growth model in which production is carried out by heterogeneous establishments and calibrate it to US data, and argue that differences in the allocation of resources across establishments that differ in productivity may be an important factor in accounting for cross-country differences in output per capita.
1,299 citations
Journal Article•
TL;DR: Šonje et al. as mentioned in this paper used a sample of 35 countries for the period between 1860 and 1963 to show the relationship between income and financial depth measured by the ratio between bank's assets and GDP.
Abstract: relationship. All subsequent studies confirmed it (see for example King and Levine, 1993, and the review in: Pagano, 1993). Goldsmith used a sample of 35 countries for the period between 1860 and 1963 to show the relationship between income and financial depth measured by the ratio between bank's assets and GDP. He also showed that in periods of rapid growth, financial depth grows faster than income. More details about measuring financial depth can be found in this paper. FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH Velimir Šonje
891 citations
TL;DR: This article developed a model co-determining aggregate total factor productivity (TFP), sectoral TFP, and scales across industrial sectors and found that financial frictions disproportionately affect TFP in tradable sectors where production requires larger costs.
Abstract: Explaining levels of economic development hinges on explaining TFP dierences across coun- tries. In poor countries, total factor productivity (TFP) is particularly low in sectors producing tradable goods. We document that an important dierence between tradable and non-tradable sectors is their average establishment size: Tradable establishments operate at much larger scales. We develop a model co-determining aggregate TFP, sectoral TFP, and scales across industrial sectors. In our model, …nancial frictions disproportionately aect TFP in tradable sectors where production requires larger …xed costs. Our quantitative exercises show that …- nancial frictions explain a substantial part of the observed cross-country relationship between aggregate TFP, sectoral TFP, and output per worker.
884 citations
TL;DR: In this article, the role of financial frictions in determining total factor productivity (TFP) was evaluated using producer-level data, and a model of establishment dynamics was proposed to reduce TFP through two channels: finance frictions distort entry and technology adoption decisions.
Abstract: We use producer-level data to evaluate the role of financial frictions in determining total factor productivity (TFP). We study a model of establishment dynamics in which financial frictions reduce TFP through two channels. First, finance frictions distort entry and technology adoption decisions. Second, finance frictions generate dispersion in the returns to capital across existing producers and thus productivity losses from misallocation. Parameterizations of our model consistent with the data imply fairly small losses from misallocation, but potentially sizable losses from inefficiently low levels of entry and technology adoption. (JEL E32, E44, F41, G32, L60, O33, O47)
874 citations