This paper develops a model of banking frictions and banking risk, the importance of which is highlighted by the recent Global Financial Crisis (GFC). As a sort of systemic risk, changes in banking risk lead to fluctuations in aggregate economic activity. We propose a model-based approach to...

We study the effect of technological progress on the optimal transition to a renewable energy-fueled world economy. We develop a dynamic general equilibrium model where energy is used as an input in production and can come from fossil or renewable sources. Both require the use of capital, which...