Leverage restrictions in a business cycle model
We seek to develop a business cycle model with a financial sector which can be used to study the consequences of policies to restrict the leverage of financial institutions (banks). Because we wish the model to be consistent with basic features of business cycle data we introduce our banking system...
Guardado en:
| Autores principales: | , |
|---|---|
| Formato: | Artículo |
| Lenguaje: | eng |
| Publicado: |
Banco Central de Chile
2019
|
| Materias: | |
| Acceso en línea: | https://hdl.handle.net/20.500.12580/3806 |
| Etiquetas: |
Agregar Etiqueta
Sin Etiquetas, Sea el primero en etiquetar este registro!
|
| id |
oai-20.500.12580-3806 |
|---|---|
| record_format |
dspace |
| spelling |
oai-20.500.12580-38062021-04-24T11:08:18Z Leverage restrictions in a business cycle model Christiano, Lawrence J. Ikeda, Daisaku, 1928- CICLOS ECONÓMICOS BANCOS MERCADO FINANCIERO We seek to develop a business cycle model with a financial sector which can be used to study the consequences of policies to restrict the leverage of financial institutions (banks). Because we wish the model to be consistent with basic features of business cycle data we introduce our banking system into a standard medium sized DSGE model such as Christiano Eichenbaum and Evans (2005) (hereinafter CEE) or Smets and Wouters (2007). Banks in our model operate in perfectly competitive markets. Our model implies that social welfare is increased by restricting bank leverage relative to what leverage would be if financial markets were unregulated. With less leverage banks are in a position to use their net worth to insulate creditors in case there are losses on bank’s balance sheets. Our model implies that by reducing risk to creditors agency problems are mitigated and the efficiency of the banking system is improved. 2019-11-01T00:06:10Z 2019-11-01T00:06:10Z 2014 Artículo 978-956-7421-45-9 https://hdl.handle.net/20.500.12580/3806 eng Series on Central Banking Analysis and Economic Policies no. 19 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 215-256 application/pdf Banco Central de Chile |
| institution |
Banco Central |
| collection |
Banco Central |
| language |
eng |
| topic |
CICLOS ECONÓMICOS BANCOS MERCADO FINANCIERO |
| spellingShingle |
CICLOS ECONÓMICOS BANCOS MERCADO FINANCIERO Christiano, Lawrence J. Ikeda, Daisaku, 1928- Leverage restrictions in a business cycle model |
| description |
We seek to develop a business cycle model with a financial sector which can be used to study the consequences of policies to restrict the leverage of financial institutions (banks). Because we wish the model to be consistent with basic features of business cycle data we introduce our banking system into a standard medium sized DSGE model such as Christiano Eichenbaum and Evans (2005) (hereinafter CEE) or Smets and Wouters (2007). Banks in our model operate in perfectly competitive markets. Our model implies that social welfare is increased by restricting bank leverage relative to what leverage would be if financial markets were unregulated. With less leverage banks are in a position to use their net worth to insulate creditors in case there are losses on bank’s balance sheets. Our model implies that by reducing risk to creditors agency problems are mitigated and the efficiency of the banking system is improved. |
| format |
Artículo |
| author |
Christiano, Lawrence J. Ikeda, Daisaku, 1928- |
| author_facet |
Christiano, Lawrence J. Ikeda, Daisaku, 1928- |
| author_sort |
Christiano, Lawrence J. |
| title |
Leverage restrictions in a business cycle model |
| title_short |
Leverage restrictions in a business cycle model |
| title_full |
Leverage restrictions in a business cycle model |
| title_fullStr |
Leverage restrictions in a business cycle model |
| title_full_unstemmed |
Leverage restrictions in a business cycle model |
| title_sort |
leverage restrictions in a business cycle model |
| publisher |
Banco Central de Chile |
| publishDate |
2019 |
| url |
https://hdl.handle.net/20.500.12580/3806 |
| work_keys_str_mv |
AT christianolawrencej leveragerestrictionsinabusinesscyclemodel AT ikedadaisaku1928 leveragerestrictionsinabusinesscyclemodel |
| _version_ |
1718346576583196672 |