This article presents a monetary growth model in which spatial separation and limited communication create a role for banks. Monetary policy interacts with the financial system's liquidity provision to affect the existence, multiplicity, and dynamical properties of equilibria. Moderate levels of...

This article formalizes investor rationality and irrationality, exuberance and apprehension, to consider the implications of belief formation for the fragility of an economy¦s financial structure. The model presented generates a financial structure with portfolio linkages that make it...

This article identifies four U.S. credit crunches-periods of sharply increased non-price credit rationing-between 1960 and 1992. Extreme intimidation of banks by the Federal Reserve and U.S. federal government through jawboning and credible threats of increased regulatory oversight caused the...