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Confidence of Agents and Market Frictions

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  • Dmitriev, Mikhail

Abstract

In this paper financial frictions are represented by agents heterogeneity. Presence of savers and borrowers permits to analyse financial frictions in a simple and tractable framework. Different types of borrowers create an effect of costly state verification models. Comparatively to these standard CSV framework different types of shocks are modelled, such as expected increase in the income of borrowers or change in the distribution of borrowers quality. Modellin these effects is hard in representative agent framework and such shocks were not analysed in CSV framework before.

Suggested Citation

  • Dmitriev, Mikhail, 2009. "Confidence of Agents and Market Frictions," MPRA Paper 21149, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:21149
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    File URL: https://mpra.ub.uni-muenchen.de/21149/1/MPRA_paper_21149.pdf
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    References listed on IDEAS

    as
    1. Nir Jaimovich & Sergio Rebelo, 2007. "Behavioral Theories of the Business Cycle," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 361-368, 04-05.
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    4. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
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    More about this item

    Keywords

    Financial Frictions; DSGE; Business Cycles;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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