Arbeitspapier

Coordination Frictions and The Financial Crisis

In this note I argue that the desirability of fiscal policy in response to the current crisis depends on whether one views the current crisis as a temporary deviation from a unique equilibrium or as a bad equilibrium out of multiple equilibria. The paper presents a simple Diamond (1982) type of model where firms must find an (investment) bank to finance their projects and the investment banks sell risky assets to get capital from investors. Due to coordination frictions, the economy can get stuck in an inefficient low-trade equilibrium. Finally, I briefly discuss some of the policies that have recently been put forward to stimulate the economy in the context of this model.

Sprache
Englisch

Erschienen in
Series: Tinbergen Institute Discussion Paper ; No. 09-028/3

Klassifikation
Wirtschaft
Financial Markets and the Macroeconomy
Fiscal Policy
Unemployment: Models, Duration, Incidence, and Job Search
Thema
financial crisis
coordination frictions
macroeconomic complementarities
search frictions
Finanzkrise
Internationaler Finanzmarkt
Marktmechanismus
Finanzintermediation
Asymmetrische Information
Suchtheorie
Theorie

Ereignis
Geistige Schöpfung
(wer)
Gautier, Pieter A.
Ereignis
Veröffentlichung
(wer)
Tinbergen Institute
(wo)
Amsterdam and Rotterdam
(wann)
2009

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Gautier, Pieter A.
  • Tinbergen Institute

Entstanden

  • 2009

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