This paper will create a dynamic economic model where the objective for the government is to maximize economic growth with respect to the available capital in the economy. The amount of capital in the economy is determined by the capitalists in the model which represent the micro foundation in...

It is no secret that one of the key sources of economic growth is the entrepreneurial activity. But this type of activity is fraught with great risk, which is largely exacerbated by liquidity constraints. This situation is especially relevant for countries with a high level of income inequality,...

Structural vector autoregressive analysis aims to trace the contemporaneous linkages among (macroeconomic) variables back to underlying orthogonal structural shocks. In homoskedastic Gaussian models the identification of these linkages deserves external and typically notdata-based information....

In this study I examine the welfare implications of monetary policy by constructing a novel New Keynesian model that properly accounts for asset pricing facts. I find that the Ramsey optimal monetary policy yields an inflation rate above 3.5% and inflation volatility close to 1.5%. The same...

This paper presents a quantitative model of financial transactions between economic agents on economic space. Risk ratings of economic agents play role of their coordinates. Aggregate amounts of agent's financial variables at point x define macro financial variables as functions of time and...

For markets to work efficiently, buyers and sellers must be able to transact easily. People must have access to a marketplace such as a supermarket or a stock exchange with adequate liquidity. Further, people must have confidence that such a well-functioning marketplace will also exist in the...