A model to analyse financial fragility: applications
The purpose of our work is to explore contagious financial crises. To this end, we use simplified, thus numerically solvable, versions of our general model [Goodhart, Sunirand and Tsomocos (2003)]. The model incorporates heterogeneous agents, banks and endogenous default, thus allowing various feedb...
| Main Authors: | , |
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| Format: | Working paper |
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University of Oxford
2004
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| _version_ | 1797062214555795456 |
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| author | Goodhart, C Sunirand, P |
| author_facet | Goodhart, C Sunirand, P |
| author_sort | Goodhart, C |
| collection | OXFORD |
| description | The purpose of our work is to explore contagious financial crises. To this end, we use simplified, thus numerically solvable, versions of our general model [Goodhart, Sunirand and Tsomocos (2003)]. The model incorporates heterogeneous agents, banks and endogenous default, thus allowing various feedback and contagion channels to operate in equilibrium. Such a model leads to di.erent results from those obtained when using a standard representative agent model. For example, there may be a trade-o. between e.ciency and financial stability, not only for regulatory policies, but also for monetary policy. Moreover, agents which have more investment opportunities can deal with negative shocks more effectively by transferring "negative externalities" onto others. |
| first_indexed | 2024-03-06T20:42:19Z |
| format | Working paper |
| id | oxford-uuid:34b04871-17e5-436a-9566-9d54035b91e0 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T20:42:19Z |
| publishDate | 2004 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:34b04871-17e5-436a-9566-9d54035b91e02022-03-26T13:27:31ZA model to analyse financial fragility: applicationsWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:34b04871-17e5-436a-9566-9d54035b91e0Bulk import via SwordSymplectic ElementsUniversity of Oxford2004Goodhart, CSunirand, PThe purpose of our work is to explore contagious financial crises. To this end, we use simplified, thus numerically solvable, versions of our general model [Goodhart, Sunirand and Tsomocos (2003)]. The model incorporates heterogeneous agents, banks and endogenous default, thus allowing various feedback and contagion channels to operate in equilibrium. Such a model leads to di.erent results from those obtained when using a standard representative agent model. For example, there may be a trade-o. between e.ciency and financial stability, not only for regulatory policies, but also for monetary policy. Moreover, agents which have more investment opportunities can deal with negative shocks more effectively by transferring "negative externalities" onto others. |
| spellingShingle | Goodhart, C Sunirand, P A model to analyse financial fragility: applications |
| title | A model to analyse financial fragility: applications |
| title_full | A model to analyse financial fragility: applications |
| title_fullStr | A model to analyse financial fragility: applications |
| title_full_unstemmed | A model to analyse financial fragility: applications |
| title_short | A model to analyse financial fragility: applications |
| title_sort | model to analyse financial fragility applications |
| work_keys_str_mv | AT goodhartc amodeltoanalysefinancialfragilityapplications AT sunirandp amodeltoanalysefinancialfragilityapplications AT goodhartc modeltoanalysefinancialfragilityapplications AT sunirandp modeltoanalysefinancialfragilityapplications |