The Macroeconomics of Corporate Debt

The Macroeconomics of Corporate Debt

By
Markus Brunnermeier, Arvind Krishnamurthy
The Review of Corporate Finance Studies. November
2020, Vol. 9, Issue 3, Pages 656-665

The 2020 COVID-19 crisis can spur research on firms’ corporate finance decisions and their macroeconomic implications, similar to the wave of important research on banking and household finance triggered by the 2008 financial crisis. What are the relevant corporate finance mechanisms in this crisis? Modeling dynamics and timing considerations are likely important, as is integrating corporate financing considerations into modern quantifiable macroeconomics models. Recent empirical work, including articles in this special issue, on the drag from debt in the COVID-19 crisis provides a first glimpse into the new research agenda.