Credit constraints, firms' precautionary investment and the business cycle

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit constraints. Following a negative and persistent aggregate productivity shock, firms shift into short-term investments because they produce more pledgeable output and because they help alleviate future borrowing constraints. This produces a short-run dampening of the effects of the shock, at the expense of lower long-term investment and future output, relative to an economy with no credit market imperfections. The effects are exacerbated by a steepening of the term structure of interest rates that further encourages a shift towards short-term investments in the short-run. Small temporary shocks to the severity of financing frictions generate large and long-lasting effects on output through their impact on the composition of investment. A positive financial shock produces much stronger effects than an identical negative shock, while the responses to positive and negative shocks to aggregate productivity are roughly symmetric. Finally, the paper introduces a novel explanation for the countercyclicality of financing constraints of firms.Investment composition, Financial frictions, Business cycles, Idiosyncratic production risk, Firm heterogeneity

The Szeg\"o curve and Laguerre polynomials with large negative parameters

We study the asymptotic zero distribution of the rescaled Laguerre polynomials, $\displaystyle L_n^{(\alpha_n)}(nz)$, with the parameter $\alpha_n$ varying in such a way that $\displaystyle \lim_{n\rightarrow \infty}\alpha_n/n=-1$. The connection with the so-called Szeg\"{o} curve will be showed

Equilibrium measures in the presence of certain rational external fields

Equilibrium measures in the real axis in the presence of rational external fields are considered. These external fields are called rational since their derivatives are rational functions. We analyze the evolution of the equilibrium measure, and its support, when the size of the measure, $t$, or other parameters in the external field vary. Our analysis is illustrated by studying with detail the case of a generalized Gauss-Penner model, which, in addition to its mathematical relevance, has important physical applications (in the framework of random matrix models). This paper is a natural continuation of \cite{MOR2013}, where equilibrium measures in the presence of polynomial external fields are thoroughly studied

The confined Muskat problem: differences with the deep water regime

We study the evolution of the interface given by two incompressible fluids with different densities in the porous strip \RR\times[-l,l]. This problem is known as the Muskat problem and is analogous to the two phase Hele-Shaw cell. The main goal of this paper is to compare the qualitative properties between the model when the fluids move without boundaries and the model when the fluids are confined. We find that, in a precise sense, the boundaries decrease the diffusion rate and the system becomes more singular.Comment: Revised version. 32 pages, 4 figure