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dc.contributor.authorBlás, Beatriz de
dc.contributor.authorMalmierca Ordoqui, María
dc.identifier.citationBlas, Beatriz de; Malmierca, M: Financial frictions and stabilization policies, Economic Modelling, Volume 89, 2020. Pages 166-188es
dc.description.abstractAfter 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-fiscal policy mix is not enough to offset this private-public debt mechanism and therefore bring back economic stability. When macroprudential policy is part of the policy mix, the private-public debt channel can be broken. Interestingly, depending on the macroprudential instrument, a trade-off may arise between private debt and output
dc.titleFinancial frictions and stabilization policieses
dc.typejournal articlees
dc.journal.titleEconomic Modellinges
dc.rights.accessRightsMetadata only accesses
dc.subject.areaEconomía Aplicadaes

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