________________________________________________________________________ Abstract. The Firm-Value Risk Model combines the technology of actuarial optimal dividends models with insights regarding financial frictions from financial economics, especially as they apply to risk transfer in (re)insurance firms. This paper illustrates, by numerical solution of a set of case studies, how certain styliz...

We analyze conventional and unconventional monetary policies in a dynamic small open-economy model with financial frictions. In the model, financial intermediaries or banks borrow from the world market and lend to domestic households. Banks can borrow abroad up to a multiple of their equity; in turn, there is a limit to how much bank equity households can hold. An economy-wide credit constraint...

B efore the incidence of the financial crisis in 2008, the financial sector was ignored in the most of business cycles analyses. It was assumed that the financial sector played no independent role in describing business cycle fluctuations and followed the real part of the economy. In recent years, modeling financial frictions have been much considered in business cycles literature. T...