This work employs a dynamic general equilibrium model to evaluate the causes and implications of bank insolvencies.We apply the model to stylized data from Bangladesh, a country whose banking system is currently suffering from large stocks of non-performing assets. The model is used to derive...

We analyze a variety of macroeconomic policy issues confronting Bangladesh. We develop an intertemporal general equilibrium model and simulate it using Bangladesh parameters. Our estimated model generates reasonably accurate replicas of historical reality. We impose a reduction in current...