Kunieda, Takuma and Shibata, Akihisa (2012): Business Cycles and Financial Crises: A Model of Entrepreneurs and Financiers.
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A dynamic general equilibrium model with infinitely lived entrepreneurs and financiers is developed to investigate a possible mechanism that explains business cycles and a financial crisis. The highest growth rate is achievable only if financiers coexist with entrepreneurs, given a certain extent of financial market imperfections. However, if financiers coexist with entrepreneurs, the economy is highly likely to go into a financial crisis for some parameter values. These two-sided implications of the coexistence of entrepreneurs and financiers explain why both instability and high growth are frequently observed in modern economies.
|Item Type:||MPRA Paper|
|Original Title:||Business Cycles and Financial Crises: A Model of Entrepreneurs and Financiers|
|Keywords:||Endogenous business cycles; Financial crisis; Economic boom; Financial market imperfections|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
|Depositing User:||Takuma Kunieda|
|Date Deposited:||30. Jul 2012 09:31|
|Last Modified:||14. Feb 2013 00:00|
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