Liquidity, crisis and public policies: a model-based approach

This course will introduce alternative macroeconomic frameworks with financial frictions to understand financial crisis, business cycles and public policy. First, the instructor will provide with a brief historical overview of financial crises and basic financial accelerator models which emphasizes the interaction between borrowing constraint, asset price and aggregate production. Then, the liquidity constraint will be introduced to examine the business cycles and monetary policy. Finally, the instructor will present and discuss financial intermediaries to study banking crisis, credit policy and macro prudential policy. By developing these frameworks, the course aims to develop a framework which will empower participants to understand the recent financial crisis and the roles of public policies.