Essays in macroeconomics and banking productivity

A huge volume of theoretical literature has suggested that frictions/constraints in financial markets play a critical role in propagating and amplifying macroeconomic shocks. In this dissertation I search for these financial accelerator effects in the U.S. Specifically, I embed the Kiyotaki and Moore (1997) and Kocherlakota (2000) credit multipliers into an otherwise standard RBC model with costly financial intermediation. I calibrate the model to U.S. post-1959 data to study the response of the main macroeconomic aggregates after a TFP shock hits either the banking sector or the non-financial sectors of the economy. I find that the impulse-response functions are not significantly sensitive, qualitatively and quantitatively, to the presence of the credit multipliers. Financial acceleration is missing in U.S. macroeconomic data. On the other hand, a 40%–60% fall in the volatility of the U.S. business cycle in the mid-80's has been documented in the literature. I document a simultaneous drop in the cyclical volatility of TFP and labor productivity in U.S. commercial banks. Using the same model and calibration I find that the fall in the cyclical volatility of U.S. banking productivity contributes significantly only to the volatility fall of the U.S. credit cycle (not to the volatility fall of the other U.S. macroeconomic aggregates' cycle) and that allowing for financial acceleration does not change the results significantly. Financial acceleration only augments the contribution of the fall in the cyclical volatility of banking productivity to the credit cycle volatility fall.