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The small decline in the value of mortgage-related assets relative to the large total losses associated with the financial crisis suggests the presence of financial amplification mechanisms, which allow relatively small shocks to propagate through the financial system. We review the literature...
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degree of loss aversion can explain this transmission pattern. To this end, I allow for loss averse depositors within a … from a negative deposit rate decreases with increasing: i) degrees of loss aversion; ii) levels of switching costs; and iii …
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economy and, second, what policy rule would work best to assist the central bank in reaching its objectives via several loss … different sub-periods. We find that when considering the central bank's loss functions, the estimates often indicate the …
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