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A Macroeconomic Model with Financial Panics

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  • Mark Gertler
  • Nobuhiro Kiyotaki
  • Andrea Prestipino

Abstract

This paper incorporates banks and banking panics within a conventional macroeconomic framework to analyze the dynamics of a financial crisis of the kind recently experienced. We are particularly interested in characterizing the sudden and discrete nature of the banking panics as well as the circumstances that makes an economy vulnerable to such panics in some instances but not in others. Having a conventional macroeconomic model allows us to study the channels by which the crisis affects real activity and the effects of policies in containing crises.

Suggested Citation

  • Mark Gertler & Nobuhiro Kiyotaki & Andrea Prestipino, 2017. "A Macroeconomic Model with Financial Panics," NBER Working Papers 24126, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24126
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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