TAILIEUCHUNG - A MODEL OF MORAL-HAZARD CREDIT CYCLES

In 1969 President Nixon introduced an NIT called the Family Assis- tance Plan (FAP) that would have replaced the AFDC program. Although it enjoyed widespread initial support, the FAP was subsequently attacked by liberals as being insufficiently generous and by conservatives as being overly expensive and having insufficiently stringent work requirements. Russell Long, then chair of the Senate Finance Committee, opposed the FAP and, as an alternative, designed a proposal targeted at those willing to work. His 1972 proposal included a large public service jobs component and a “work bonus” equal to 10 percent of wages subject to Social Secu- rity taxation. The FAP was defeated in 1972, but. | A MODEL OF MORAL-HAZARD CREDIT CYCLES by Roger B. Myerson March 2010 revised September 2012 http rmyerson research Abstract This paper considers a simple model of credit cycles driven by moral hazard in financial intermediation. Financial agents or bankers must earn moral-hazard rents but the cost of these rents can be efficiently spread over an agent s entire career by promising large late-career rewards if the agent has a consistently successful record. Dynamic interactions among different generations of financial agents can create credit cycles with repeated booms and recessions. In recessions a scarcity of trusted financial intermediaries limits investment and reduces employment. Under such conditions taxing workers to subsidize bankers may increase employment enough to make the workers better off. I. Introduction This paper analyzes a simple model to show how boom-bust credit cycles can be sustained in economies with moral hazard in financial intermediation. Problems of moral hazard in banks and other financial institutions were evident at many stages of the recent financial crisis but the role of moral hazard has been less clear in traditional macroeconomic theory. As Freixas and Rochet 1997 have noted modern microeconomic models of banking depend on advances in information economics and agency theory which were not available when the traditional Keynesian and monetarist theories were first developed. So now as economists confront the need for deeper insights into the forces that can drive macroeconomic instability we should consider new models that can apply the microeconomic theory of banking to the macroeconomic theory of business cycles. In particular we should recognize that moral hazard in financial intermediation has a fundamental role at the heart of any capitalist economy. A successful economy requires industrial concentrations of capital that are vastly larger than any typical individual s wealth and the mass of small .

• Ngân hàng - Tín dụng
• Support and Pressure
• New Financial Calculus
• Oxytocin and Myometrial
• Contractility in Labor
• Operative Vaginal Deliveries
• BMC Pulmonary Medicine
• Noninvasive pressure support ventilation
• Statin associated necrotizing myopathy
• Rare autoimmune disorder
• Muscle enzymes
• Lower body positive pressure support
• Gait training
• Conventional treadmill gait training
• A randomized clinical trial
• Body positive pressure treadmill
• BMC Pediatrics
• Noninvasive respiratory ventilation
• Non invasive high frequency oscillatory ventilation
• Continuous positive airway pressure
• Post extubation phase
• Positive pressure respiration
• Ventilator weaning
• Spontaneous breathing trials
• Interactive ventilatory support
• Respiratory system
• Control of breathing
• Case report
• trình bày báo cáo
• tài liệu báo cáo khoa học
• báo cáo y học
• kiến thức y học
• nghiên cứu y học
• Respiratory failure
• Non invasive respiratory support
• Critical care
• Nasal continuous positive airway pressure
• Cost effectiveness analysis
• Respiratory distress syndrome
• Ventilatory support
• Bubble continuous positive airway pressure