Financial friction

There is a lot of discussion of macroeconomic models that include financial frictions.  These attempt to add something that resembles the financial crisis to the standard DSGE model.



There is a discussion on Robert's Stochastic Thoughts that attempts to link Keynes' Chapter 12 to the models of the consumption function.  There is plenty of scope here to mix theory and empirical evidence on the performance of savings.



I will add more here as I find it.