We simulate interbank lending. Each bank faces fluctuations in deposits and stochastic investment opportunities which mature with delay. This creates the risk of liquidity shortages. An interbank market lets participants pool this risk but also creates the potential for one bank's crisis to...

Modern macroeconomic models with a Keynesian flavour usually involve nominal rigidities in wages and commodity prices. A typical microfoundation recurs to wage bargaining in the labour markets and monopolistic competition in the commodity markets (e.g. Blanchard/Giavazzi). A characteristic...

In this paper we investigate the closed-economy Keynes-Wicksell-Goodwin model of Chiarella and Flaschel (2000) for the case of two interacting open economies. We introduce these coupled two-country KWG dynamics on the extensive form level by means of a subdivision into nine modules describing...