Financial Intermediation and Macroeconomic Fluctuations
نویسنده
چکیده
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 decisions and their importance for macroeconomic stability. Therefore my thesis proposes a framework to study the dynamic interaction between banks’ financial conditions, their lending decisions and the aggregate economy. This framework is being extended to investigate a current policy issue regarding Basel II and finally the empirical implications of the model will be explored in U.S. banking data.
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