Department of Economics and Business - Universitat Pompeu Fabra

Title:: Boundedly rational credit cycles
Author:: María Sáez
Date:: February 1996
Abstract:: We propose an evolutionary model of a credit market. We show that the economy exhibits credit cycles. The model predicts dynamics which are consistent with some evidence about the Great Depression. Real shocks trigger episodes of credit--crunch which are observed in the process of adjustment towards the post shock equilibrium.
Area of Research:: Finance and Accounting

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