|This course focuses on understanding the role of external financing, financial crises, and their effects on the real economy. First, we will discuss models of decentralized trading in financial markets, where illiquidity may be due to informational or trading frictions. Then we will focus on the macroeconomic effects of financial crises. We will focus on the effects of deleveraging of households and firms on economic activity and unemployment.
Description and/or course criteria last updated: 08/2013