Financial Crises and Recapitalizations

Material TypeArticleLanguageEnglish
TitleFinancial Crises and Recapitalizations Author(S)SANDRI DAMIANO (Author)
Abstract  We develop a dynamic stochastic general equilibrium model with financial frictions on both financial intermediaries and goods-producing firms. Since financial intermediaries are highly leveraged, we show that the welfare gains from their recapitalization in response to large but rare net worth losses are as large as those from eliminating typical business cycle fluctuations. ...Paginationp 59–86
Journal TitleJournal of Money, Credit, and Banking  
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