Liquidity Trap and Excessive Leverage

Released on by Mr.Anton Korinek
preview-18

  • Liquidity Trap and Excessive Leverage Book Detail

  • Author : Mr.Anton Korinek
  • Release Date : 2014-07-21
  • Publisher : International Monetary Fund
  • Genre : Business & Economics
  • Pages : 49
  • ISBN 13 : 1498370942
  • File Size : 49,49 MB
DOWNLOAD BOOK

Liquidity Trap and Excessive Leverage by Mr.Anton Korinek PDF Summary

Book Description: We investigate the role of macroprudential policies in mitigating liquidity traps driven by deleveraging, using a simple Keynesian model. When constrained agents engage in deleveraging, the interest rate needs to fall to induce unconstrained agents to pick up the decline in aggregate demand. However, if the fall in the interest rate is limited by the zero lower bound, aggregate demand is insufficient and the economy enters a liquidity trap. In such an environment, agents' exante leverage and insurance decisions are associated with aggregate demand externalities. The competitive equilibrium allocation is constrained inefficient. Welfare can be improved by ex-ante macroprudential policies such as debt limits and mandatory insurance requirements. The size of the required intervention depends on the differences in marginal propensity to consume between borrowers and lenders during the deleveraging episode. In our model, contractionary monetary policy is inferior to macroprudential policy in addressing excessive leverage, and it can even have the unintended consequence of increasing leverage.

Disclaimer: www.yourbookbest.com does not own Liquidity Trap and Excessive Leverage books pdf, neither created or scanned. We just provide the link that is already available on the internet, public domain and in Google Drive. If any way it violates the law or has any issues, then kindly mail us via contact us page to request the removal of the link.

Liquidity Trap and Excessive Leverage

Liquidity Trap and Excessive Leverage

File Size : 39,39 MB
Total View : 1763 Views
DOWNLOAD

We investigate the role of macroprudential policies in mitigating liquidity traps driven by deleveraging, using a simple Keynesian model. When constrained agent

A Crisis of Beliefs

A Crisis of Beliefs

File Size : 73,73 MB
Total View : 3817 Views
DOWNLOAD

"How investor expectations move markets and the economy. The collapse of Lehman Brothers in September 2008 caught markets and regulators by surprise. Although t

Handbook of Financial Integration

Handbook of Financial Integration

File Size : 3,3 MB
Total View : 3383 Views
DOWNLOAD

This comprehensive Handbook deftly examines key aspects of financial integration, providing an overview of contemporary research and new perspectives. Employing

The Butterfly Defect

The Butterfly Defect

File Size : 59,59 MB
Total View : 9162 Views
DOWNLOAD

How to better manage systemic risks—from cyber attacks and pandemics to financial crises and climate change—in a globalized world The Butterfly Defect addre