Pecuniary Externalities in Economies with Financial Frictions

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Where Modern Macroeconomics Went Wrong (2017, unknown): “Unless one has succeeded in eliminating the prospect of future crises, the 33 See Korinek (2010, 2011a,b, 2012), Jeanne and Korinek (2010), and Dávila and Korinek (2017).”
Regulating Capital Flows to Emerging Markets: An Externality View (2018, unknown): “3See Davila and Korinek (2017) for a careful differentiation between the two types of pecuniary externalities.”
Uncertainty Shocks and Balance Sheet Recessions (2017, background): “Dávila and Korinek (2016) refer to this type of externality as a “binding price constraint” externality. It is important to distinguish it from the externality in Lorenzoni (2008), where incomplete aggregate risk sharing prevents marginal rates of substitution from equalizing across aggregate states”