Acemoglu, Daron; Ozdaglar, Asuman; Tahbaz-Salehi, Alireza - National Bureau of Economic Research (NBER) - 2015
We document that even though the normal distribution is a good approximation to the nature of aggregate fluctuations, it severely underpredicts the frequency of large economic downturns. We then provide a model that can explain these facts simultaneously. Our model show that the propagation of...