GFC and the Short Run Model Week 11 Readings Jones, 3rd Edition chapters 10 & 14 This lecture’s objectives ◦ Analyze the Great Financial Crisis (or Great Recession) by amending our models for financial frictions Economics 2102 Week 11 2 1. Prelmiinary ◦ Credit relationships play an integral part in modern economies and are interdependent E.g trade credit, inter-bank lending, bank commercial lending, mortgage lending, bond markets ◦ When credit markets, the ‘financial economy’, seize up, the…
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