Business fluctuations in a behavioral switching model: Gridlock effects and credit crunch phenomena in financial networks

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2020
Volume: 114
Issue: C

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In this paper we characterize the evolution over time of a credit network in the most general terms as a system of interacting banks and firms operating in a three-sector economy with goods, credit and interbank market. Credit connections change over time via an evolving fitness measure depending from lenders’ supply of liquidity and borrowers’ demand of credit. Moreover, an endogenous learning mechanism allows agents to switch between a loyal or a shopping-around strategy according to their degree of satisfaction. The crucial question we investigate is how financial bubbles and credit-crunch phenomena emerge from the implemented mechanism.

Technical Details

RePEc Handle
repec:eee:dyncon:v:114:y:2020:i:c:s0165188918303476
Journal Field
Macro
Author Count
3
Added to Database
2026-01-25