An Essay in Financial Macroeconomics
Loading...
Date
2023-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
UMT, Lahore
Abstract
This thesis takes a fixed-point method of construction for idiosyncratic risk in the US financial
market, S&P-500 in particular, for a financial macroeconomic general equilibrium result with the
help of a very basic yet innovative DSGE modeling. Instead of a linear and complete financial
market equilibrium in isolation this approach allows for a nonlinear general equilibrium in an
explicit financial market bent. The fixed-point, alongside another, measure of idiosyncratic risk
used for the very first time through this thesis for a combined financial macroeconomic
equilibrium is found to be especially very useful for empirically modeling inflation as compared
to the output gap.