Abstract The quality of bank lending is increasingly viewed as a force driving the buildup and unfolding crises. In dynamic general equilibrium model, we show that banks’ access to liquidity values loan portfolios govern incentives effectiveness in producing information on loans. Consistent with granular loan-level evidence from US banks, calibrated model predicts due diligence deteriorates dur...

In contrast with the financial multiplier literature, this note explores a case in which the shock triggering a financial crisis stems from the financial sector itself; it is not a shock stemming from the real sector which gets amplified by, say, agency problems. The micro foundations are provided by the bank run literature epitomized by the seminal paper by Diamond and Dybvig (1983). Financial...

The simultaneous determination of financial default and political crises is studied in an open economy model. Political crises accompany default in equilibrium because of an information transmission conflict between the government and the public. Multiple equilibria are possible: if foreign lenders are pessimistic about the country’s stability, they demand a high interest on the debt, exacerbat...

Do aggregate income shocks, such as those caused by macroeconomic crises or droughts, reduce child human capital? The answer to this question has important implications for public policy. If shocks reduce investments in children, they may have a long-lasting impact on poverty and its intergenerational transmission. The authors develop a simple framework to analyze the effects of aggregate econo...

This paper proposes a model of international trade with capital accumulation and …nancial intermediation. This is achieved by embedding the Melitz (2003) model into an incomplete-markets neoclassical framework with an endogenous credit market. The model preserves the analytical tractability of the original Melitz model despite nontrivial distribution of …rms’net worth and capital stocks. We use...

This paper proposes a model of international trade with capital accumulation and …nancial frictions. This is achieved by embedding the Melitz (2003) model into an incomplete-markets neoclassical framework with an endogenous credit market. The model preserves the analytical tractability of the original Melitz model. We use the model to examine the di¤erential e¤ects of …nancial and non-…nancial ...

Whilst the analysis of impact Cohesion Policy funds is well documented, little known about short-term consequences during economic crises and its implications for regional resilience. To study these issues, we assemble novel, panel time-series data on covering almost four programming periods different shocks in European Union. Using heterogeneous coefficients models, find a general positive res...

abstract comparison of food prices in different periods, indicates fluctuations and continually upward trend. any change in agricultural sector variables, as main food supplier, will affect food price. productivity shocks and production gap are examples of such variables. in this paper ,hodrick prescott and kalman filters are used as generators of productivity shocks and production gap series. ...

in this research, potential effects of oil and monetary policy shocks on economic growth of iran are examined and share of each of them on economic growth are calculated during 1974-2006 period and potential mutual effects of those shocks by using the vector auto regressive (var) model are analysed. results of this research show that oil shocks significantly affected the economic growth in iran...