The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the … characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary … well as gradual real income losses, the economic policy implication for Japan and Europe is the timely exit from the …

—the liquidity premium. We rationalize this finding in an estimated heterogeneous-agent New-Keynesian (HANK) model with incomplete … markets and portfolio choice, in which public debt affects private liquidity. In this environment, the short-run fiscal … multiplier is amplified by the countercyclical liquidity premium. This liquidity channel stabilizes investment and crowds in …

This paper introduces agent heterogeneity, liquidity, and endogenous default to a DSGE framework. Our model allows for … the economy. Due to liquidity and endogenous default, the transmission mechanism of shocks is well defined, and their …

This paper studies banks' liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate …