An increasingly important research agenda in macroeconomics has been to analyze the relationship between the business cycle and the condition of firms' and households' balance sheets. The focus of this research has mainly been to study the way in which exogenous shocks may be amplified through the financial system, whereas the related idea, much entertained by earlier macroeconomic thinking, that the financial system may itself be a source of endogenous volatility has received relatively less attention. On the other hand, having experienced the advances in quantitative business cycle modelling, many macroeconomists as well as policy-makers strongly feel there is an urgent need to incorporate elements from modern financial market research, which emphasizes the implications of, in particular, informational asymmetries, into standard dynamic business cycle models. The financial sector in the latter models is more often than not highly simplified, so that the macroeconomic implications of important questions related to the way agents finance their activities, have access to financial markets and choose their contractual arrangements, cannot be easily analyzed with the help of these models. We encourage research on the relationship between the financial structure and the macroeconomic performance of the economy and invite papers on the macroeconomic implications of credit markets and financial market imperfections. We in particular encourage research on - Credit markets and business cycles - Financial propagation - Endogenous credit cycles and financial dampening - Financial market imperfections and quantitative business cycle modelling.
Papers and presentations
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