Peer-Reviewed Journal Details
Mandatory Fields
Khalil, S,Kinsella, S
2015
April
European Journal Of Economics And Economic Policies-Intervention
Bad banks choking good banks: simulating balance sheet contagion
Published
()
Optional Fields
credit crunch contagion stock-flow consistent models
12
51
72
We investigate the propagation of contagion through banks' balance sheets in a two-country model. We simulate an increase in non-performing loans in one bank, and study the effects on other banks and the macro-economy of each country. We show that credit crunches destabilize each economy in the short run and in the long run reduce potential output. We quantify this loss.
10.4337/ejeep.2015.01.06
Grant Details