Modelling an Interconnected Economy- General Equilibrium and Matching Model Approaches

Abstract

Zuzana Dobrotková Modelling an Interconnected Economy - General Equilibrium and Matching Model Approaches Abstrakt v češtině - dokument nenalezen

Modelling an interconnected economy - general equilibrium and matching model approaches (Abstract) Zuzana Dobrotková This doctoral dissertation consists of three theoretical articles with a com- mon interest in the creation of interconnections in an economy and the role of these interconnections in spreading bad shocks. The spread of bad shocks has been explored in economics literature mainly in the context of contagious bank runs but the following articles focus on different aspects of economy where the effects of deterioration of an economy's characteristics occur. Interconnections in economies are often necessary for production or they serve as an insurance tool but they at the same time expose the economy to a possible spread of damage. The mechanism is very simple. A negative shock that hits one agent in the economy can spread through interconnections in the economy, such as financial linkages between banks, supply linkages between firms, or personal linkages, like marriage, between agents. In the following models I study optimal creation of interconnections in two different types of economy and I also study properties of an interconnected economy in general equilibrium. In the first article I propose a general equilibrium model of an economy where firms are connected through supply linkages crucial for...