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dc.contributor.authorMoon, Kyounghwanen_US
dc.date.accessioned2018-11-07T15:59:50Z
dc.date.issued2012
dc.date.submitted2012
dc.identifier.otherb38910743
dc.identifier.urihttps://hdl.handle.net/2144/32038
dc.descriptionThesis (Ph.D.)--Boston Universityen_US
dc.descriptionPLEASE NOTE: Boston University Libraries did not receive an Authorization To Manage form for this thesis or dissertation. It is therefore not openly accessible, though it may be available by request. If you are the author or principal advisor of this work and would like to request open access for it, please contact us at open-help@bu.edu. Thank you.en_US
dc.description.abstractOne of the lessons from the recent global financial crisis is the importance of macro-financial linkage in the economy. Based on this background, this dissertation analyzes the effects of financial frictions on the aggregate activities of the economy, wealth distribution and business cycles. The first chapter investigates the effects of financial development on aggregate capital accumulation and wealth distribution by constructing a heterogeneous-agent general equilibrium model with two idiosyncratic risks, endogenous occupational choice and Holmstrom and Tirole (1999) type financial contracts to prevent moral hazard issue. The benchmark model is calibrated to match the empirical data, where the wealth distribution has a right-hand fat tail and a small number of entrepreneurs hold a large amount of wealth. We find that financial development measured by decrease of monitoring cost contributes to the economy's higher capital accumulation and lower wealth Gini coefficient. The second chapter develops a dynamic stochastic general equilibrium (DSGE) model with financial frictions arising from the moral hazard problem as in Holmstrom and Tirole (1997) together with regulatory capital requirements on the banks. In contrast with the standard BGG (1999) financial accelerator model, we consider the agency problem from hidden action and regulatory capital requirements on the banks in order to examine whether changes of regulatory capital requirements result in credit crunches in the transmissions of aggregate technology and monetary policy shocks. The third chapter explores quantitative experiments using the above DSGE model. We examine whether there exists a "financial accelerator" effect from these kinds of financial frictions and a "credit crunch" from shocks. We find that there exists a "financial accelerator" effect and that financial deepening measured by decrease of financial intermediary's monitoring costs could contribute to mitigating business cycle fluctuations. In particular, no financial frictions with zero monitoring cost could decrease the variance of aggregate investment to around 18.5%. We also find that imposing and increasing capital requirements on the banks could cause decrease of bank's lending ("credit crunch"), thereby amplifying business cycles.en_US
dc.language.isoen_US
dc.publisherBoston Universityen_US
dc.subjectBusiness cyclesen_US
dc.subjectWealth distributionen_US
dc.subjectFinancial frictionsen_US
dc.titleEffects of financial frictions on wealth distribution, capital accumulation and business cyclesen_US
dc.typeThesis/Dissertationen_US
dc.description.embargo2031-01-02
etd.degree.nameDoctor of Philosophyen_US
etd.degree.leveldoctoralen_US
etd.degree.disciplineEconomicsen_US
etd.degree.grantorBoston Universityen_US
dc.identifier.barcode11719032087191
dc.identifier.mmsid99196041190001161


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