Kotb, Naira; Proaño, Christian R. - In: International Journal of Finance & Economics 28 (2022) 4, pp. 3789-3807
In this paper, we incorporate a stock market and a banking sector in a behavioural macro‐finance model with heterogenous and boundedly rational expectations. Households' savings are diversified among bank deposits and stock purchases, and banks' lending to firms is subject to capital‐related...