A Macroeconomic Model with Financial Panics

Mark Gertler, Nobuhiro Kiyotaki, Andrea Prestipino

NBER Working Paper No. 24126
Issued in December 2017
NBER Program(s):Asset Pricing, Economic Fluctuations and Growth, International Finance and Macroeconomics, Monetary Economics

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.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w24126

Published: Mark Gertler & Nobuhiro Kiyotaki & Andrea Prestipino, 2020. "A Macroeconomic Model with Financial Panics," The Review of Economic Studies, vol 87(1), pages 240-288. citation courtesy of