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In this paper we present an overview of theoretical and empirical contributions exploring the inter-linkages between financial factors and real economic activity. We first revisit the main theoretical approaches that allow financial frictions to be embedded into general equilibrium models, and...
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framework starts by discerning driving forces set in motion by the initial shock. These are higher discounts applied by decision … institutions. The next step is to study how driving forces influence general equilibrium, both at the time of the initial shock and … later as its effects, persist. Some of the effects propagate the effects of the shock—they contribute to poor performance …
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We show that an otherwise standard one-sector real business cycle model with variable capital utilization and mild increasing returns-to-scale is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news shocks to two formulations of future...
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What, ultimately, is different from quarter to quarter or year to year that accounts for the fact that macroeconomic variables change over these intervals? That is, which are the biggest ultimate sources, in terms we may say of tastes, technology, endowments, government policy, industrial...
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