  This paper proposes a novel dynamical model for determining clearing payments
in financial networks. We extend the classical Eisenberg-Noe model of financial
contagion to multiple time periods, allowing financial operations to continue
after possible initial pseudo defaults, thus permitting nodes to recover and
eventually fulfil their liabilities. Optimal clearing payments in our model are
computed by solving a suitable linear program, both in the full matrix payments
case and in the pro-rata constrained case. We prove that the proposed model
obeys the \emph{priority of debt claims} requirement, that is, each node at
every step either pays its liabilities in full, or it pays out all its balance.
In the pro-rata case, the optimal dynamic clearing payments are unique, and can
be determined via a time-decoupled sequential optimization approach.
