Financial frictions and stabilization policies
Fecha
2020Citación
Blas, Beatriz de; Malmierca, M: Financial frictions and stabilization policies, Economic Modelling, Volume 89, 2020. Pages 166-188
Resumen
After the financial crisis of 2007, in many economies, public and private debt have moved in opposite directions, as opposed to pre-2007 evidence. Private deleverage and public debt build-up may affect the recovery path of countries after a recession. In a new Keynesian model with financial frictions, we show that when the economy is hit by a credit risk shock, the negative correlation arising between public and private debt amplifies the response of GDP. In our setup, the traditional monetary-f ...
Áreas Temáticas
Departamentos
Tipo de documento
journal article