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Information and credit cycles: Causes and consequences of financial instability

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  • Silvo, Aino

Abstract

This thesis consists of an introductory chapter and three self-contained essays that apply insights from the microeconomic theory of corporate finance in a macroeconomic setting in order to explain and understand various market failures that were at the roots of the global financial crisis of 2007–2009. In particular, I study various forms of incomplete information in the credit market, and their implications on financial stability and on business cycles in the aggregate economy. I also seek to understand how monetary and macroprudential policies can be used to maintain financial stability, and how these two policies interact.

Suggested Citation

  • Silvo, Aino, 2018. "Information and credit cycles: Causes and consequences of financial instability," Bank of Finland Scientific Monographs, Bank of Finland, volume 0, number e52, July.
    • Handle: RePEc:zbw:bofism:e52
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    References listed on IDEAS

    as
    1. Cúrdia, Vasco & Woodford, Michael, 2016. "Credit Frictions and Optimal Monetary Policy," Journal of Monetary Economics, Elsevier, vol. 84(C), pages 30-65.
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    3. Faia, Ester, 2010. "Credit risk transfers and the macroeconomy," Working Paper Series 1256, European Central Bank.
    4. Gelain, Paolo & Lansing, Kevin J., 2014. "House prices, expectations, and time-varying fundamentals," Journal of Empirical Finance, Elsevier, vol. 29(C), pages 3-25.
    5. Andrea Gerali & Stefano Neri & Luca Sessa & Federico M. Signoretti, 2010. "Credit and Banking in a DSGE Model of the Euro Area," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(s1), pages 107-141, September.
    6. Gary Gorton, 2008. "The panic of 2007," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 131-262.
    7. David de Meza & David C. Webb, 1987. "Too Much Investment: A Problem of Asymmetric Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 281-292.
    8. repec:zbw:bofrdp:2016_012 is not listed on IDEAS
    9. Gertler, Mark & Karadi, Peter, 2011. "A model of unconventional monetary policy," Journal of Monetary Economics, Elsevier, vol. 58(1), pages 17-34, January.
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