Credit market imperfection, financial market globalization, and catastrophic transition

Anna Agliari, George Vachadze

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Over the past two decades a substantial body of research has been developed to investigate macroeconomic implications of credit market imperfection. These studies have demonstrated that credit market imperfection can be responsible for a)propagation, amplification, and persistence of macroeconomic shocks to fundamentals (as in [7,9,12]); (b)the indeterminacy of equilibria, which can lead to endogenous, self-fulfilling, expectations-driven business cycle fluctuations (as in [21,5,6,4]); c)the persistence of volatility (as in 10,17,18]); and (d)the magnification of between and within country income inequality (as in [15,16]). The main goal of the present paper is to contribute to our understanding by offering new insights about the macroeconomic implications of credit market imperfection.
Original languageEnglish
Pages (from-to)41-62
Number of pages22
JournalMathematics and Computers in Simulation
Volume2015
DOIs
Publication statusPublished - 2015

Keywords

  • Catastrophic transition
  • Crater bifurcation
  • Credit market imperfection
  • Financial globalization

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