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"We analyze financial collapses, such as the one that occurred during the U.S. Great Depression, from the perspective of a monetary model with multiple equilibria.The multiplicity arises from the presence of a strategic complementarity due to increasing returns to scale in the intermediation...
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capital accu- mulation. Our estimation strategy searches for parameters that minimize ex post errors in an Euler equation … estimation of parameters of dynamic optimization problems in which non-convexities lead to extended periods of investment …
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