scholarly journals Moral Hazard and Efficiency in General Equilibrium with Anonymous Trading

2010 ◽  
Author(s):  
Daron Acemoglu ◽  
Alp Simsek
Keyword(s):  
Moral Hazard ◽  
General Equilibrium

scholarly journals Bank Leverage Cycles

2017 ◽  
Vol 9 (2) ◽  
pp. 32-72 ◽  
Author(s):  
Galo Nuño ◽  
Carlos Thomas
Keyword(s):  
Financial Crisis ◽  
Moral Hazard ◽  
General Equilibrium ◽  
Economic Activity ◽  
Asset Returns ◽  
Financial Intermediaries ◽  
Risk Shifting ◽  
Short Term ◽  
Risky Debt

We propose a general equilibrium framework with financial intermediaries subject to endogenous leverage constraints, and assess its ability to explain the observed fluctuations in intermediary leverage and real economic activity. In the model, intermediaries (“banks”) borrow in the form of short-term risky debt. The presence of risk-shifting moral hazard gives rise to a leverage constraint, and creates a link between the volatility in bank asset returns and leverage. Unlike TFP or capital quality shocks, volatility shocks produce empirically plausible fluctuations in bank leverage. The model replicates well the fall in leverage, assets, and GDP during the 2007–2009 financial crisis. (JEL D82, E44, G01, G21, G32)

Moral hazard and general equilibrium in large economies

2001 ◽  
Vol 18 (3) ◽  
pp. 555-575 ◽  
Author(s):  
Marcos B. Lisboa
Keyword(s):  
Moral Hazard ◽  
General Equilibrium

On moral hazard in general equilibrium theory

1975 ◽  
Vol 10 (1) ◽  
pp. 8-23 ◽  
Author(s):  
Elhanan Helpman ◽  
Jean-Jacques Laffont
Keyword(s):  
Moral Hazard ◽  
General Equilibrium ◽  
Equilibrium Theory ◽  
General Equilibrium Theory
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