| Financial frictions have been used to enrich mechanism transmission in macroeconomics. However, the predictions of real business cycle models of costly external finance imply a procyclical default rate, external premium and relative price of capital which seems at odd with the data. In the first chapter, we include technology shocks that affect the average productivity and idiosyncratic risk of capital producers in a standard costly external finance model. These elements enhance the model to deliver a countercyclical default rate, external finance and relative price of capital premium which is more consistent with the data and contrary to the result obtained with a sector neutral productivity shock. Using US data on the relative price of capital, we perform a calibration of this type of shocks which highlights its business cycle relevance.;The second chapter analyzes the firm dynamics when the entrepreneurs have limited enforcement to the financial contracts. We characterize the optimal constrained contract under this imperfection in the presence of productivity and interest rate fluctuations. We show that along the optimal contract productivity and interest rate fluctuations have amplified effects on the firms dynamics beyond what would be predicted in the case of perfect enforceability. Moreover, the persistence of these fluctuations is higher when the enforceability problems are more severe. These findings can be related to the fact that countries with better enforceability of contracts display deeper financial development and better economic performance.;In the third chapter, we analyze the optimal monetary policy in a small open economy with sticky prices, costly exchange of wealth for goods, and asset market segmentation. Calibrating the model for the Chilean economy, we find that the optimal policy seeks a low level for the nominal interest rate in the long run. In the short run, the optimal monetary policy reacts such that the nontradable price level should be approximately stabilized. Furthermore, the conduct of the optimal policy resembles an inflation targeting rule closely. Finally, the asset market segmentation does not seem to affect the goal of price stabilization. However, this friction implies a higher nominal interest volatility. Therefore, the additional presence of a credit channel in the supply side could change the tradeoff between inflation and nominal interest rate volatility. |
