Replication data for: Safety Traps
Principal Investigator(s): View help for Principal Investigator(s) Kenza Benhima; Baptiste Massenot
Version: View help for Version V1
Name | File Type | Size | Last Modified |
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AEJMacro-2011-0183_simulations | 12/07/2019 03:01:PM | ||
LICENSE.txt | text/plain | 14.6 KB | 12/07/2019 10:01:AM |
Project Citation:
Benhima, Kenza, and Massenot, Baptiste. Replication data for: Safety Traps. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116430V1
Project Description
Summary:
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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.
Scope of Project
JEL Classification:
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D14 Household Saving; Personal Finance
E13 General Aggregative Models: Neoclassical
E21 Macroeconomics: Consumption; Saving; Wealth
E22 Investment; Capital; Intangible Capital; Capacity
E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
D14 Household Saving; Personal Finance
E13 General Aggregative Models: Neoclassical
E21 Macroeconomics: Consumption; Saving; Wealth
E22 Investment; Capital; Intangible Capital; Capacity
E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
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