logo
CanyamAI summaries for academic research
language
MobileMobile
  • Phone FeatureWeChat Mini Program
EnglishEnglish
noticeNotice
BlogBlog
delete
arrow
Return

Counter-Cyclical Defaults in Costly State Verification Models

delete2025-11-01
delete0
PRE
AI
M
Michele Piffer *
DOI：10.1111/manc.70015delete
deleteOriginal
deleteOriginal request for help
deleteShare
deleteSave
Abstract

Abstract

En 中文
This paper shows that a pro-cyclical risk-free rate can solve the problem of pro-cyclical defaults in costly state verification models. The paper computes numerically the coefficient of a Taylor rule that delivers pro-cyclical output, pro-cyclical capital and counter-cyclical defaults. This parametrization is consistent with the empirical evidence on Taylor rules.
Keywords:
costly state verification
financial accelerator
pro-cyclical default

Journal

M
Manchester School
IF:
1.1
Papers:
29
Citations:
1.2K

Organization

No organization information available