Essays on the Macroeconomics of Long-Term Relationships

This thesis consists of three chapters on theoretical macroeconomics, each one examining the consequences of long-term relationships between economic agents. In the first chapter, the relationships in question are supply-chain linkages between firms. I build a tractable model of buyer-supplier relat...

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Bibliographic Details
Author: Esala, Lauri
Format: doctoral thesis
Status:Published version
Publication Date:2024
Country:España
Institution:CBUC, CESCA
Repository:TDR. Tesis Doctorales en Red
OAI Identifier:oai:www.tdx.cat:10803/691981
Online Access:http://hdl.handle.net/10803/691981
Access Level:Embargoed access
Keyword:Macroeconomics
Macroeconomía
33
Description
Summary:This thesis consists of three chapters on theoretical macroeconomics, each one examining the consequences of long-term relationships between economic agents. In the first chapter, the relationships in question are supply-chain linkages between firms. I build a tractable model of buyer-supplier relationship formation, where linkages are timeconsuming to create, and possibly difficult to replace if lost. In steady state, I exhibit a novel trade-off: firms’ forward-looking considerations about supply chain fragility and growth potential may sometimes dissuade them from forming matches with the highest current profit. The second chapter expands the framework to study the macroeconomic dynamics of a large-scale supply chain disturbance. To be able to solve larger versions of the model, I develop a new simulation-based solution method. The final chapter examines the relationship between banks and their borrowers. It shows that a long-lasting period of expansionary monetary policy may amplify banks’ incentives to “evergreen” loans to unviable borrowers.