Benigno, Gianluca; Chen, Huigang; Otrok, Christopher; … - In: Journal of International Economics 89 (2013) 2, pp. 453-470
In this paper we study a two-sector production small open economy subject to a collateral constraint in which a financial crisis can arise endogenously and alternate with normal time periods. In this class of models, the scope for policy intervention arises because individual agents do not...