Credit Frictions and The Cleansing Effect of Recessions
研究了信贷摩擦如何影响衰退期间低生产率企业被淘汰的净化效应，发现无论衰退源于生产率冲击还是金融冲击，平均企业生产率都会上升。
Recessions are conventionally considered as times when the least productive firms are driven out of the market. How do credit frictions affect this cleansing effect of recessions? We build and calibrate a model of firm dynamics with credit frictions and endogenous entry and exit to investigate this question. We find that there is a cleansing effect of recessions in the presence of credit frictions, despite their effect on the selection of exiting and entering firms. This result holds true regardless of the nature of the recession: average firm-level productivity rises following a negative aggregate productivity shock, as well as following a negative financial shock.