Macroprudential policies

We consider alternative macroeconomic frameworks with financial frictions to understand financial crisis, business cycles and public policy. There will be an brief historical overview of financial crises and basic financial accelerator models which emphasizes the interaction between borrowing constraint, asset price and aggregate production.

We then introduce liquidity constraint to examine the business cycles and monetary policy. Finally, we introduce financial intermediaries and government to study banking crisis, credit policy and macro prudential policy. By developing these frameworks, we aim to understand the recent financial crisis and the roles of public policies.