[STBI-20190830] Financial frictions, financial shocks and economic fluctuations
Welcome back to the Small Talks Big Ideas – STBI seminars this Fall 2019.
Topic: Financial frictions, financial shocks and economic fluctuations
Presenter: Nguyen Xuan Lam (UEH School of Economics)
Time: 11:00 – Friday, 30 August, 2019
Venue: Room H.001, Campus H, UEH School of Economics, 1A Hoang Dieu, Phu Nhuan District, Ho Chi Minh City
Abstract: Financial factors had been largely neglected in the mainstream macroeconomic literature in the last twenty years before the 2007-2008 global financial crisis (GFC). Many policy institutions around the world prior to the GFC relied on business cycle models that did not even consider explicitly the financial sector. In particular, financial market imperfections had been omitted from the pre-crisis generation of Dynamic Stochastic General Equilibrium (DSGE) models that was used as the standard workhorse in the analysis of the business cycle. This was probably a symptom reflecting the propensity to overconfidence on the efficiency of the financial market hiding the implicit acceptance of the Modigliani-Miller theorem. The latest ensuing financial turmoil served as a wakeup call, which made it clear that business cycle modeling can no longer ignore the financial market imperfection. Since then, economists in both academia and policy institutions have been working to revive this tradition by incorporating financial friction approaches into standard business cycle models. In this seminar, Xuan-Lam Nguyen will present main approaches in the literature to modeling financial market imperfections in the general equilibrium framework..
About the presenter: Dr. Nguyen Xuan Lam has been working as a lecturer at University of Economics Ho Chi Minh City and got the PhD Degree from Australian National University. His main teaching and research areas are Macroeconomics, Industrial Organization and minor topics in Real Estate Economics.