A Reinterpretation of the Gordon and Barro Model in Terms of Financial Stability Reportar como inadecuado




A Reinterpretation of the Gordon and Barro Model in Terms of Financial Stability - Descarga este documento en PDF. Documentación en PDF para descargar gratis. Disponible también para leer online.

A government bailout model based on the framework of time-consistent mone-tary policy of Barro and Gordon (1983) is developed. In the model, the bankingsector and the government play a game where the former chooses a bailout expec-tation whereas the later reacts by choosing its optimal bailout policy. The bankingsector is assumed to be perfectly competitive, aiming only at anticipating the bailoutpolicy. An excess of credit ensues and firms over-invest, which can be amended byan appropriately chosen reserve requirement. The government faces a trade-off be-tween efficiency and stability in trying to minimize the costs of intervention.

Keywords: Government intervention ; bailout ; real investment

Subject(s): Financial Economics

Issue Date: Aug 12 2014

Publication Type: Working or Discussion Paper

PURL Identifier: http://purl.umn.edu/182483

Total Pages: 9

JEL Codes: G1; G2; G3

Series Statement: Finance

F14_6

Record appears in: University of Queensland > School of Economics > Risk and Sustainable Management Group Working Papers





Autor: Beteto Wegner, Danilo Lopomo

Fuente: http://ageconsearch.umn.edu/record/182483?ln=en







Documentos relacionados