Aoki, Kosuke; Nakajima, Tomoyuki; Nikolov, Kalin - Canon Institute for Global Studies - 2014
We build a model economy in which a shortage of safe assets can create conditions for intrinsically useless safebubble assets to circulate at a positive price. Our environment features in
nitely lived individu-als who are not subject to credit constraints but who face uninsurable idiosyncratic...