A Macroeconomist's Wish List of Financial Data

V.V. Chari
Publication Type: 
Working Papers
Publication Article File: 
Publication Year: 
2012

Developing an understanding of how financial market disturbances affect the broader economy is crucial for designing appropriate regulatory policy on financial markets. Recent research on general equilibrium models with financial frictions offers a great deal of promise in understanding links between financial markets and the rest of the economy. In particular, many recent models focus on how frictions in financial markets impede firms’ investment decisions. I argue that further development of this class of models requires data on the financial statements of nonfinancial firms. Such data is available for publicly traded firms but is not available for privately held firms in the United States. Such data is available from the tax returns that corporations file, as well as the statements firms make available to financial intermediaries when they seek to borrow funds, but detailed data on individual firms is not publicly available. Making this kind of data more publicly available would help academics develop better models and would also help make policy.

This paper was presented at the Flow of Funds Accounts and Savings Workshop in April of 2012. The corresponding presentation is also available.

Region: 
United States and Canada
Country: 
USA
Topic: 
Flow of Funds
Topic: 
Regulation
Topic: 
Economic Modeling