Discussion Paper
No. 2008-40 |
December 16, 2008
How We Might Model a Credit Squeeze, and Draw Some Policy Implications
Abstract
This paper endeavours to illustrate the consequences of a credit squeeze by inserting a standard model of retail banks into some familiar macroeconomic models. Some possible policy conclusions are drawn about the benefits of incentives to increase lending at these times, and to reduce it in much better times. Paper submitted to the special issue “Learning from the Financial Crisis”
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