Credit Crises, Precautionary Savings, and the Liquidity Trap

Veronica Guerrieri, Guido Lorenzoni

NBER Working Paper No. 17583
Issued in November 2011

---- Acknowledgments ----

We thank Bob Hall and John Leahy for their useful discussions and for numerous exchanges. For helpful comments, we are grateful to Andy Atkeson, Chris Carroll, V. V. Chari, Vasco Curdia, Greg Kaplan, Juan Pablo Nicolini, Thomas Philippon, Valery Ramey, Rob Shimer, Nancy Stokey, Amir Sufi, Gianluca Violante, Iván Werning, Mike Woodford, Pierre Yared, and numerous seminar participants. Adrien Auclert and Amir Kermani provided outstanding research assistance. Guerrieri thanks the Sloan Foundation for financial support and the Federal Reserve Bank of Minneapolis for its hospitality. Lorenzoni thanks the NSF for financial support and Chicago Booth and the Becker Friedman Institute for their hospitality. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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