Economic models

• A Model of Costly Capital Reallocation and Aggregate Productivity

  Staff Working Paper 2008-38 Shutao Cao

  The author studies the effects of capital reallocation (the flow of productive capital across firms and establishments mainly through changes in ownership) on aggregate labour productivity. Capital reallocation is an important activity in the United States: on average, its total value is 3–4 per cent of U.S. GDP.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Productivity JEL Code(s): E, E2, E22, L, L1, L16

• The Role of Bank Capital in the Propagation of Shocks

  Staff Working Paper 2008-36 Césaire Meh, Kevin Moran

  Recent events in financial markets have underlined the importance of analyzing the link between the financial health of banks and real economic activity. This paper contributes to this analysis by constructing a dynamic general equilibrium model in which the balance sheet of banks affects the propagation of shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial institutions, Financial system regulation and policies, Monetary policy transmission JEL Code(s): E, E4, E44, E5, E52, G, G2, G21