This paper argues that the investment–savings imbalances of households and companies play an important role in determining the probability that an economy experiences a credit-less recovery, following a recession. The investment–savings gap determines the need for “external” finance of...

Using Swedish monthly data for the period 1980:1 to 1994:3, a set of questions motivated by the literature on the lending channel of monetary policy is addressed. The main results are: Regulations on banks portfolio decisions that were in force up to 1985 seem effective in that bank lending move...

On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle...