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- Title
Financial constraints and capacity adjustment in the United Kingdom: evidence from a large panel of survey data.
- Authors
von Kalckreuth, Ulf; Murphy, Emma
- Abstract
This article reports that the recent research has shown that the causes and effects of financial constraints for firms in the private sector is of key importance for a variety of policy issues relevant to central banks. First, the quantitative and qualitative features of monetary transmission depend on whether or not borrowing and other financial constraints have important effects on the real economy. Second, the real consequences of shocks to the financial system depend on the way in which firms cope with their financial constraints. Third, financial constraints might be especially relevant for investment activities that are difficult to raise finance for but quite important for economic growth, such as research and development, or the introduction of innovative products and processes.
- Subjects
UNITED Kingdom; CORPORATE finance; PRIVATE sector; INVESTMENTS; GROWTH rate; FINANCIAL performance; ECONOMIC indicators
- Publication
Bank of England Quarterly Bulletin, 2005, Vol 45, Issue 2, p184
- ISSN
0005-5166
- Publication type
Article