Economic dynamics with financial fragility and mean-field interaction: a model
Following the statistical mechanics methodology, firstly introduced in macroeconomics by Aoki [1996,2002], we provide some insights to the well known works of Greenwald and Stiglitz [1990, 1993]. Specifically, we reach analytically a closed form solution of their models overcoming the aggregation problem. The key idea is to represent the economy as an evolving complex system, composed by heterogeneous interacting agents, that can partitioned into a space of macroscopic states. This meso level of aggregation permits to adopt mean field interaction modeling and master equation techniques.
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- Bruce C. Greenwald & Joseph E. Stiglitz, 1990.
"Macroeconomic Models with Equity and Credit Rationing,"
NBER Chapters,in: Asymmetric Information, Corporate Finance, and Investment, pages 15-42
National Bureau of Economic Research, Inc.
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