How Long to Read Macro-prudential Policy in a Fisherian Model of Financial Innovation

How Long Does it Take to Read Macro-prudential Policy in a Fisherian Model of Financial Innovation?

It takes the average reader and 54 minutes to read Macro-prudential Policy in a Fisherian Model of Financial Innovation by Javier Bianchi

Assuming a reading speed of 250 words per minute. Learn more

Description

The interaction between credit frictions, financial innovation, and a switch from optimistic to pessimistic beliefs played a central role in the 2008 financial crisis. This paper develops a quantitative general equilibrium framework in which this interaction drives the financial amplification mechanism to study the effects of macro-prudential policy. Financial innovation enhances the ability of agents to collateralize assets into debt, but the riskiness of this new regime can only be learned over time. Beliefs about transition probabilities across states with high and low ability to borrow change as agents learn from observed realizations of financial conditions. At the same time, the collateral constraint introduces a pecuniary externality, because agents fail to internalize the effect of their borrowing decisions on asset prices. Quantitative analysis shows that the effectiveness of macro-prudential policy in this environment depends on the government's information set, the tightness of credit constraints and the pace at which optimism surges in the early stages of financial innovation. The policy is least effective when the government is as uninformed as private agents, credit constraints are tight, and optimism builds quickly.

How long is Macro-prudential Policy in a Fisherian Model of Financial Innovation?

Macro-prudential Policy in a Fisherian Model of Financial Innovation by Javier Bianchi is 54 pages long, and a total of 13,716 words.

This makes it 18% the length of the average book. It also has 17% more words than the average book.

How Long Does it Take to Read Macro-prudential Policy in a Fisherian Model of Financial Innovation Aloud?

The average oral reading speed is 183 words per minute. This means it takes 1 hour and 14 minutes to read Macro-prudential Policy in a Fisherian Model of Financial Innovation aloud.

What Reading Level is Macro-prudential Policy in a Fisherian Model of Financial Innovation?

Macro-prudential Policy in a Fisherian Model of Financial Innovation is suitable for students ages 8 and up.

Note that there may be other factors that effect this rating besides length that are not factored in on this page. This may include things like complex language or sensitive topics not suitable for students of certain ages.

When deciding what to show young students always use your best judgement and consult a professional.

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