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This paper analyzes quantitatively the extent to which there is overborrowing (i.e., inefficient borrowing) in a … finding of the analysis is that overborrowing is not a robust feature of this class of model economies: it depends on the … calibration, but overborrowing with more impatient agents and more volatile shocks. Endowment economies display overborrowing …
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A standard DSGE small open economy model can not generate the cyclical regularities of middle-income countries. It predicts excessive consumption smoothing, and procyclical, instead of countercyclical, real net exports. Previous studies have solved this problem by increasing the shocks'...
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This paper studies overborrowing, financial crises and macro-prudential policy in an equilibrium model of business …
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