Heterogeneity and redistribution in financial crises

Keiichiro Kobayashi, Daichi Shirai

研究成果: Article

1 引用 (Scopus)

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This paper presents a simple model of an economy with heterogeneous agents to show that the redistribution of wealth among such agents can play a significant role in the propagation mechanism of financial crises. In an economy where firms with heterogeneous productivity operate under borrowing constraints, the redistribution reproduces hump-shaped responses for output and labor and procyclicality in observed productivity. In this model, a financial shock generates a persistent and hump-shaped response, whereas a productivity shock does not. Further, the redistribution of wealth significantly amplifies the persistence and hump shape of these responses following a financial shock. This model suggests that redistribution may thus be a key driving force behind the transmission of financial crises.

元の言語English
ページ(範囲)1527-1549
ページ数23
ジャーナルMacroeconomic Dynamics
20
発行部数6
DOI
出版物ステータスPublished - 2016 9 1

ASJC Scopus subject areas

  • Economics and Econometrics

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