Raising implied equity has therefore the additional benefit of making the economic system more resilient to shocks, i.e. it has stabilising as well as allocative properties. See Holmström, Bengt and Jean Tirole (2010), Inside and Outside Liquidity, MIT Press.
BIS central bankers’ speeches  5  We face however a circular problem in the euro area: we need higher potential growth to work through the debt overhang so that firms can being investing again; but that investment is itself necessary to raise potential growth.