Safety Traps

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Etat: Serval
Version: de l'auteur
ID Serval
serval:BIB_7CF47793CCCD
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
Safety Traps
Périodique
American Economic Journal. Macroeconomics
Auteur(s)
Benhima K., Massenot B.
ISSN
1945-7707
Statut éditorial
Publié
Date de publication
10/2013
Peer-reviewed
Oui
Volume
5
Numéro
4
Pages
68-106
Langue
anglais
Résumé
Fear of risk provides a rationale for protracted economic downturns. We develop a real business cycle model where investors with decreasing relative risk aversion choose between a risky and a safe technology that exhibit decreasing returns. Because of a feedback effect from the interest rate to risk aversion, two equilibria can emerge: a standard equilibrium and a "safe" one in which investors invest in safer assets. We refer to the dynamics of this second equilibrium as a safety trap because it is self-reinforcing as investors accumulate more wealth and show it to be consistent with Japan's lost decade.
Mots-clé
decreasing relative risk aversion, reference consumption, business cycles, Japan's lost decade
Web of science
Création de la notice
13/08/2012 17:17
Dernière modification de la notice
03/03/2018 18:38
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