Confidence of Agents and Market Frictions

Mikhail Dmitriev

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper financial frictions are represented by agents heterogeneity. Presence of savers and borrowers permits to analyse financial frictions in a simple and tractable framework. Different types of borrowers create an effect of costly state verification models. Comparatively to these standard CSV framework different types of shocks are modelled, such as expected increase in the income of borrowers or change in the distribution of borrowers quality. Modellin these effects is hard in representative agent framework and such shocks were not analysed in CSV framework before.

Keywords: Financial Frictions; DSGE; Business Cycles (search for similar items in EconPapers)
JEL-codes: E2 E21 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21149

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