Andolfatto, David; Nosal, Ed - 2017
A bank panic is an expectation-driven redemption event that results in a self-fulfilling prophecy of losses on demand … deposits. From the standpoint of theory in the tradition of Diamond and Dybvig (1983) and Green and Lin (2003), it is … surprisingly di¢ cult to generate bank panic equilibria if one allows for a plausible degree of contractual flexibility. A common …