Shocks and Crises in the Long Run

David Frankel

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Many recent models of crises involve games with small, anonymous players and finite action sets, such as whether or not to attack a currency or withdraw funds from a bank. We show that such models, when repeated, do not yield recurring crises in the presence of a flexible class of payoff shocks. As an illustration, we apply this result to Diamond and Dybvig's model of bank runs.

JEL-codes: C73 E32 (search for similar items in EconPapers)
Date: 2010-07-10
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:31687

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