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We consider a general equilibrium model with frictions in credit markets used by households. Inour economy, houses provide housing services to consumers and serve as collateral to lower borrowingcost.We show that this amplifies and propagates the effect of monetary policy shocks on...
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We consider a linear growth model with idiosyncratic productivity shocks in whichproducers cannot commit to repay their … productivity differentials canmake the efficient growth path nonenforceable and lead to an inefficient equilibrium withbinding …
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