Macro-Prudential Policy under Moral Hazard and Financial Fragility

Borradores de Economia
Número: 
878
Publicado: 
Clasificación JEL: 
G11, D86
Palabras clave: 
DSGE Modeling, Financial Frictions, Moral Hazard, Macro-Prudential Policies

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This paper presents a DSGE model with banks that face moral hazard in management. Banks receive demand deposits and fund investment projects. Banks are subject to potential withdrawals by depositors which may force them into early liquidation of their inv