We review heterogeneous agent-based models of financial stability and their application in stress tests. In contrast to the mainstream approach, which relies heavily on the rational expectations assumption and focuses on situations where it is possible to compute an equilibrium, this approach...

This paper introduces an alternative perspective to the central themes of current literature on macroeconomic resilience and systemic risk in the global financial system. It presents an interdisciplinary discourse centered on evolutionary economics leading to theoretical propositions for a...

This paper looks at the issue of reforming financial regulatory structures from the New Institutional Economics perspective. In particular, it examines how the broader institutional environment prevailing in developing countries like the Philippines may affect the institutional arrangements for...

This paper introduces a voting model into a setting with negative borrowing externalities to study voter preferences for prudential regulation. Voters internalize the general equilibrium impact of prudential policy on future asset prices and therefore support a universal limit on current debt....