Aftermath of Banking Crises [electronic resource] : Effectson Real and Monetary Variables, Gupta, Poonam.
- Washington, D.C. : International Monetary Fund, 2000.
- IMF eLibrary
IMF Working Papers; Working Paper No. 00/96.
IMF Working Papers; Working Paper No. 00/96
- Government document
1 online resource (25 p.)
- Local subjects:
- Balance of payments crisis.
Causes of banking crises.
Cross country experience.
Minimum reserve requirement.
- In this paper a simple optimizing model is developed to analyze the implications of a banking crisis. Banks are incorporated by assuming that they intermediate funds between firms and households. It is shown that when depositors perceive the quality of deposits to have deteriorated, they switch from deposits to cash. Because of the higher cost of liquidity, consumption, M2 and the M2 multiplier decline, interest rates on deposits and loans increase and output contracts. The findings of the paper match the key stylized facts of banking crises.
- Description based on print version record.
- Gupta, Poonam.
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- Restricted for use by site license.
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