拉斯维加斯9888

标题：A model of Moral Hazard Credit Cycles

汇报人：Roger Myerson, University of Chicago

功夫：3:00-4:30pm, November 5

地址：拉斯维加斯9888新楼K03教室

Abstract:

This paper considers a simple model of credit cycles driven by moral hazard in financial intermediation. Investment advisers or bankers must earn moral-hazard rents, but the cost of these rents can be efficiently spread over a banker's entire career, by promising large back-loaded rewards if the banker achieves a record of consistently successful investments. The dynamic interactions among different generations of bankers can create equilibrium credit cycles with repeated booms and recessions. We find conditions when taxing workers to subsidize bankers can increase investment and employment enough to make the workers better off.