Inefficient Credit Booms

By Guido Lorenzoni. 2007

806 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/437290a34539ef62f2c766e172d6fc54bafe818e

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Citations in the corpus

Pecuniary Externalities in Economies with Financial Frictions (2016, neutral): “In the existing literature, the seminal papers of Gromb and Vayanos (2002) and Lorenzoni (2008) describe how asset sales by financially constrained agents can generate pecuniary externalities that lead to constrained inefficient allocations.1 Some policymakers and commentators have interpreted this…”
Systemic Risk and Stability in Financial Networks (2015, neutral): “Examples include Holmström and Tirole (1998); Brunnermeier and Pedersen (2005); Lorenzoni (2008); and Krishnamurthy (2010).”
Anchoring Countercyclical Capital Buffers: The Role of Credit Aggregates (2011, background): “Other examples that build on the financial accelerator literature developed by Bernanke and Gertler (1989) and the credit cycles model of Kiyotaki and Moore (1997) include Lorenzoni (2008) and Korinek (2011).”
Managing credit booms and busts: A Pigouvian taxation approach (2019, positive): “This type of mechanism has received a lot of attention following the US ﬁnancial crisis, and it has been suggested that prudential policies could be used to mitigate the build-up in systemic vulnerability during the boom ( Lorenzoni, 2008; Shleifer and Vishny, 2011 ).”
Credit-Market Sentiment and the Business Cycle (2017, neutral): “These externalities can be rooted in either fire-sale effects (Shleifer and Vishny, 1992; Lorenzoni, 2008; Stein, 2012; Dávila and Korinek, 2016) or in aggregate demand spillovers in the presence of a binding ZLB”
The New Economics of Prudential Capital Controls: A Research Agenda (2011, background): “Lorenzoni (2008) assumes that entrepreneurs can only pledge a fraction of their future earnings.”
A Pigovian Approach to Liquidity Regulation (2011, background): “(3) Notice that the short-term funding decision x of any bank of class θ determines, via ε(x, θ), the vulnerability of that very bank to a systemic crisis, and also, via c(X), the likelihood and/or costs of a systemic crisis to all other banks.”
Fire Sales in Finance and Macroeconomics (2011, neutral): “Lorenzoni (2008) shows that when firms ignore the effect of fire sales on other firms, the level of borrowing need not be socially efficient.”
Regulating Capital Flows to Emerging Markets: An Externality View (2018, positive): “6For a related analysis of overborrowing in the closed economy based on fire-sale externalities in asset prices see Lorenzoni (2008).”
Wholesale Banking and Bank Runs in Macroeconomic Modeling of Financial Crises (2016, background): “Lorenzoni (2008) and Bianchi (2011) are recent applications to environments with financial frictions.”