Optimal Intermediated Investment in a Liquidity-Driven Business Cycle∗
نویسندگان
چکیده
A general equilibrium model of a financial intermediary extends the model first introduced by D. Diamond and P. Dybvig (JPE, 1983) to an infinite-horizon environment. This extension enables the relationship between the real business cycle and the composition of assets held in the banking sector to be studied. As in the D-D model, the bank is an optimal financial intermediary coalition here. Moreover, the bank’s optimal policy involves decisions about liquidity that vary systematically over the business cycle.
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