into diversified portfolios, and then finance these portfolios externally with riskless debt. In this model: i) outside … investor wealth drives the demand for riskless debt and indirectly for securitization, ii) intermediary assets and leverage …

model is motivated by several features of recent crises: credit risk in the form of foreign currency denominated debt …

We study the effects of nominal debt on the optimal sequential choice of monetary policy. When the stock of debt is … nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no unanticipated … stock of debt progressively until these extra costs disappear. Nominal debt is therefore a burden on monetary policy, not …

This paper argues that the strategic use of debt favours the revelation of information in dynamic adverse selection … problems. Our argument is based on the idea that debt is a credible commitment to end long term relationships. Consequently …, debt encourages a privately informed party to disclose its information at early stages of a relationship. We illustrate our …

Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by …