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Intertemporal Greenwald-Stiglitz

Author

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  • Assenza, T.

    (Universiteit van Amsterdam)

  • Delli Gatti, D.

    (Catholic University of Milan)

Abstract

In this short paper we cast the Greenwald-Stiglitz financial accelerator framework - which was originally defined in a period by period optimization setting - in an intertemporal context. In this way we overcome one of the most frequent objections to this approach according to which agents are myopic and do not choose optimally the capital structure of the firm. In our intertemporal setting firms optimize over an infinite horizon under the constraint of net worth accumulation.

Suggested Citation

  • Assenza, T. & Delli Gatti, D., 2013. "Intertemporal Greenwald-Stiglitz," CeNDEF Working Papers 13-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    • Handle: RePEc:ams:ndfwpp:13-06
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    References listed on IDEAS

    as
    1. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-248, April.
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