We consider a general equilibrium model where groups operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the group and make it on their own or join another group. We study the effect of...

This paper provides a macroeconomic perspective for government interventions in banking crises. Such crises occur when a large number of banks fall to meet capital requirements or are insolvent. Using a macroeconomic model with financial intermediation, our analysis suggests that strict...