Financial Intermediation, Leverage, and Macroeconomic Instability
نویسندگان
چکیده
منابع مشابه
Financial Intermediation, Leverage, and Macroeconomic Instability
This paper investigates how financial-sector leverage affects macroeconomic instability and welfare. In the model, banks borrow (use leverage) to allocate resources to productive projects and provide liquidity. When banks do not actively issue new equity, aggregate outcomes depend on the level of equity in the financial sector. Equilibrium is inefficient because agents do not internalize how th...
متن کاملFinancial Intermediation and Macroeconomic Analysis
I ssues relating to fi nancial stability have always been part of the macroeconomics curriculum, but they have often been presented as mainly of historical interest, or primarily of relevance to emerging markets. However, the recent fi nancial crisis has made it plain that even in economies like the United States, signifi cant disruptions of fi nancial intermediation remain a possibility. Under...
متن کاملFinancial Intermediation and Macroeconomic Fluctuations
Economists have devoted a great deal of attention to modeling the macroeconomic implications of cyclical variation of borrowers’ creditworthiness, yet the literature has largely neglected the task of modeling the behavior of the bank. This omission in the literature is particularly unfortunate given the strong empirical evidence in support of the role of banks’ financial structure in lending de...
متن کاملWorking Paper No. 157 THE FINANCIAL LEVERAGE COEFFICIENT: Macroeconomic Implications of Government Involvement in Intermediation by
Disclaimer: The opinions presented in the paper are those of the authors and not necessarily of the organisation to which they are affiliated.
متن کاملA Leverage-Based Measure of Financial Instability
We employ a model of leverage-induced explosive behavior in financial markets to develop a measure of financial market instability. Specifically, we derive a quantitative condition for how large levered investors can become relative to the whole market before the demand curve for securities suddenly becomes upward-sloping and small price declines cascade as levered investors are forced to liqui...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: American Economic Journal: Macroeconomics
سال: 2016
ISSN: 1945-7707,1945-7715
DOI: 10.1257/mac.20140233