Facultad de Economía

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Examinando Facultad de Economía por Director "Posada Posada, Carlos Esteban"

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    Economic crisis and the financial system amplification effect
    (2012-11-22) Arango Isaza, Mauricio; Posada Posada, Carlos Esteban
    A well informed and cautious financial system can improves the welfare outcome of an economy by driving lenders surplus to borrow-ers. Nevertheless in a crisis situation the financial system cautious behavior can become a crisis amplifier given that the credit approval conditions are hardly meet, so there could be a credit crunch even in a low interest rates environment. This paper illustrates the previous by developing a general equilibrium model where the collateral credit condition defines the prudential behavior of the financial sys-tem. This and some other conditions amplify the magnitude of a negative productivity shock.