Gertler, Mark; Kiyotaki, Nobuhiro; Queralto, Albert - In: Journal of Monetary Economics 59 (2012) S, pp. 17-17
A macroeconomic model with financial intermediation is developed in which the intermediaries (banks) can issue outside equity as well as short term debt. This makes bank risk exposure an endogenous choice. The goal is to have a model that can not only capture a crisis when banks are highly...