The author develops a dynamic stochastic general-equilibrium model with an active banking sector, a financial accelerator, and financial frictions in the interbank and bank capital markets.
: Business fluctuations and cycles; Economic models; Financial markets; Financial stabilityIn this paper, we examine how the effect of movements in the real exchange rate on manufacturing plants depends on the plant's placement within the productivity distribution. Appreciations of the local currency expose domestic plants to more competition from abroad as export opportunities shrink and import competition intensifies.
: Exchange rates; Market structure and pricing; ProductivityThe author proposes a micro-founded framework that incorporates an active banking sector into a dynamic stochastic general-equilibrium model with a financial accelerator.
: Business fluctuations and cycles; Credit and credit aggregates; Economic models; Financial stabilityWe present a model of central bank collateralized lending to study the optimal choice of the haircut policy. We show that a lending facility provides a bundle of two types of insurance: insurance against liquidity risk as well as insurance against downside risk of the collateral.
: Central bank research; Financial services; Financial system regulation and policies; Monetary policy implementation; Payment clearing and settlement systems
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