decision-maker takes an action in each period. Using a novel `viscosity' dynamic programming principle, we characterise the …

Definitions of fragility are focused at the level of the state, but this should not be considered to suggest that … individuals with heterogeneous endowments experience a state of fragility in the same way. Nor does it suggest that all subregions … of a fragile country exist in this state. In turn, experience of fragility varies not just at national level but also …

How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is … borrowing, both of which influence bank fragility in opposite directions. Thus, the marginal impact of changes to the interest … rate on bank fragility depends on the level of the interest rate. Finally, we derive testable implications that may guide …

The objective of this paper is to focus on fragility research findings and examine what works or does not work in …

funds from the original lender can access funds from other sources, what we call ‘fragility’. For conditionality to work it … fragility is not a major issue conditional on investment contracts are optimal. In contrast, when fragility is a major concern … then conditional on repayment contracts are optimal as they reduce the likelihood of those states where fragility becomes …