Tamborini, Roberto (1997) A macroeconomic model of bankruptcy. UNSPECIFIED. (Unpublished)
This paper relates to the macroeconomics of imperfect capital markets. In this framework, the heterogeneity of agents, notably of borrowing firms, is a key element in the explanation of interactions between financial intermediaries and borrowers facing a bankruptcy probability. This probability is usually introduced through exogenous stochastic factors in firms' revenue. In this paper I pursue a more inherently informational approach which, even though all market processes are deterministic, partly "endogenizes" the default probability as a consequence of heterogeneous, privately-held price expectations across firms. Then I examine in detail the credit transmission mechanism and its impact on the macroeconomic variables in an economy with characteristics such as those in 1) to 5).
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