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A Simple Model of Credit Expansion

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  • Alexander Smirnov

Abstract

The proposed model is aimed to reveal important patterns in the behavior of a simplified financial system. The patterns could be detected as regular cycles consisting of debt bubbles and crises. Financial cycles have a well defined structure and form periodic sequences along the axis of credit expansion while retaining stochastic nature in terms of time.

Suggested Citation

  • Alexander Smirnov, 2016. "A Simple Model of Credit Expansion," Papers 1609.05055, arXiv.org.
    • Handle: RePEc:arx:papers:1609.05055
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