. Boom-bust dynamics are more likely when the risk-free interest rate is low because low rates strengthen belief … investment. The model thus features a 'financial accelerator', despite the absence of financial frictions. The financial … accelerator causes the economy to experience persistent periods of over- and under-accumulation of capital …

. Conversely, the positive market reaction to tax avoidance news is associated with firms that face high reputation risk. …

sentiment shock that drives the movements of bubbles and is transmitted to the real economy through endogenous credit … constraints. This shock explains most of the stock market fluctuations and sizable fractions of the variations in real quantities …

; (iii) network-based accelerator - the network structure may propagate the initial shock possibly resulting in an avalanche …In this paper we build an agent-based model based on a threefold financial accelerator: (i) leverage accelerator … credit reduction follows further reducing the output; (ii) stock market accelerator - due to lower profit, firms …

the unconditional cross-sectional moments of household consumption growth and the moments of the risk free rate, equity … premium, price-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk free rate and price …-dividend ratio are pro-cyclical while the market return has countercyclical mean and variance. Finally, household consumption risk …

and 4 years is effective in explaining the differences in risk premia across alternative test assets, including recently …

. Boombust dynamics are more likely when the risk-free interest rate is low because low rates strengthen belief … investment. The model thus features a "financial accelerator", despite the absence of financial frictions. The financial … accelerator causes the economy to experience persistent periods of over- and under-accumulation of capital. …