Journal Article
Financial frictions in macroeconomic fluctations
Abstract: The key ideas for adding financial market frictions in general equilibrium models are not new in macroeconomics. However, it is only with the recent crisis that the profession has fully recognized the importance of financial markets for business cycle fluctuations. In this article I review some of the most popular ideas proposed in the literature and I show how the modeling of financial frictions helps us understand several dynamic features of the macroeconomy.
Keywords: Business cycles; Financial institutions; Financial markets;
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Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Economic Quarterly
Publication Date: 2011
Volume: 97
Issue: 3Q
Pages: 209-254