| 简介： | We develop a dynamic stochastic general equilibrium model in which bank runs can occur. In our model, banks choose a leverage ratio that is higher than the socially efficient level because of two reasons. First, banks incur an early liquidation cost caused by bank runs, and they fail to fully internalize this negative effect on social resource. Second, banks do not take into account the excessive volatility jointly caused by the banks' amplification effect on shocks and the possibility of bank runs. When the central bank uses nominal interest rate as instrument, expansionary monetary policies can aggravate banks' overborrowing feature, increasing the probability of bank runs. We show that banking regulations which limits the bank borrowing is welfare improving. |