TY  - JOUR
U1  - Zeitschriftenartikel, wissenschaftlich - begutachtet (reviewed)
A1  - Herzog, Bodo
T1  - Analyzing a Systemic Crisis in Finance
JF  - Journal of Game Theory
N2  - A major lesson of the recent financial crisis is that money market freezes have major macroeconomic implications. This paper develops a tractable model in which we analyze the microeconomic and macroeconomic implications of a systemic banking crisis. In particular, we consider how the systemic crisis affects the optimal allocation of funding for businesses. We show that a central bank should reduce the interest rate to manage a systemic shock and hence smooth the macroeconomic consequences. Moreover, the analysis offers insight on the rational of bank behavior and the role of markets in a systemic crisis. We find that the failure to adopt the optimal policy can lead to economic fragility.
KW  - financing channels
KW  - money-market freeze
KW  - systemic crises
Y1  - 2015
U6  - https://nbn-resolving.org/urn:nbn:de:bsz:rt2-opus4-5445
UN  - https://nbn-resolving.org/urn:nbn:de:bsz:rt2-opus4-5445
UR  - http://article.sapub.org/10.5923.j.jgt.20150402.01.html
SN  - 2325-0046
SS  - 2325-0046
VL  - 4
IS  - 2
SP  - 19
EP  - 25
S1  - 7
PB  - Scientific & Academic Publishing
CY  - Rosemead, California
ER  -