This research activity is supported under the "Research Opportunities for Women--Planning Grant Program". The purpose of this program is to provide an opportunity for women, who have never been the recipient of a federal award, to undertake preliminary work to determine the feasibility of a line of research. The causes of the business cycle and the mechanisms for propagating and possibly amplifying the fluctuations in employment and output are a central issue in economics which is still far from resolved. This award will allow the investigator to begin to develop and test a model of the business cycle that explicitly takes into account the role of financial intermediaries and credit markets. To date, relatively little empirical work on business cycles has been done incorporating credit relationships into the models. This work should provide a better understanding of the role of bankruptcy and credit availability in the propagation of business cycles. This line of research is important because it may provide important insights into ways of ameliorating the fluctuations in overall economic activity.
