Run equilibria in the Green–Lin model of financial intermediation
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2022, Journal of Economic Dynamics and ControlCitation Excerpt :Relaxing this set of constraints, as in Green and Lin (2003)—so traders have some, imperfect information about their order in the sequence—may allow for a more general proof of uniqueness with i.i.d. types and many traders. However, in the banking context, as shown by Peck and Shell (2003) and Ennis and Keister (2009b), relaxing these further—so traders have no information about their order in the sequence—may imply that uniqueness is unattainable for some parameter values.9 These results suggest the possibility of an interesting tradeoff between the nature of traders’ information, the existence of speculative attack equilibria, and the value of (constrained) efficient exchange rate policy.
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