On the interaction between real economy and financial markets.

Grassetti, Francesca and Mammana, Cristiana and Michetti, Elisabetta (2019): On the interaction between real economy and financial markets.

Abstract

We introduce a dynamical model describing the interaction between a three-sectors real economy and a financial market with four assets. Investors and financial mediators have heterogeneous beliefs. The model may be used to investigate interdependence within economic fluctuations and assets volatility.

• Item Type: MPRA Paper
• Language: English
• Keywords: Asset Pricing, Economic Growth, Dynamic Analysis, General Equilibrium Model.
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E10 - General; G - Financial Economics > G1 - General Financial Markets

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