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Leverage and Asset Bubbles : Averting Armageddon with Chapter 11?
Miller, Marcus - 2010
An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism driving asset prices to 'overshoot' equilibrium when an asset bubble bursts--threatening widespread insolvency and what Richard Koo calls a 'balance sheet recession'
Persistent link: https://www.econbiz.de/10012462797
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An Empirical Study of the Credit Market with Unobserved Consumer Typers
Gan, Li - 2008
This paper proposes an econometric model to identify unobserved consumer types in the credit market. Consumers choose different amounts of loan because of differences in their time or risk preferences (types). Thus, the unconditional probability of default is modeled using a mixture density...
Persistent link: https://www.econbiz.de/10012464774
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Credit Market Freezes
Benmelech, Efraim - 2017
Credit market freezes in which debt issuance declines dramatically and market liquidity evaporates are typically … bonds declined, and secondary credit markets became highly illiquid. In this paper we analyze liquidity in bond markets … during financial crises and compare two main theories of liquidity in markets: (1) asymmetric information and adverse …
Persistent link: https://www.econbiz.de/10012455170
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Liquidity Flows and Fragility of Business Enterprises
Haan, Wouter den - 1999
liquidity. When liquidity is low, relationships are subject to breakups that lead to loss of joint surplus. Liquidity outflows …
Persistent link: https://www.econbiz.de/10012471744
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Capitalizing China
Fan, Joseph P. H. (contributor); Morck, Randall (contributor) - 2013
Persistent link: https://www.econbiz.de/10009689290
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Interpreting the Unconventional U.S. Monetary Policy of 2007-09
Reis, Ricardo - 2010
compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. The theory suggests that, to … securities markets can restore liquidity with fewer government funds than extending credit to the originators of loans …
Persistent link: https://www.econbiz.de/10012462989
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How Debt Markets have Malfunctioned in the Crisis
Krishnamurthy, Arvind - 2009
effects can arise, so that less liquidity and a higher cost for finance can reinforce each other in a contagious spiral. I … document the remarkable rise in the premium that investors placed on liquidity during the crisis. Next, I show how these issues …
Persistent link: https://www.econbiz.de/10012463107
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Liaisons Dangereuses : Increasing Connectivity, Risk Sharing, and Systemic Risk
Battiston, Stefano - 2009
We characterize the evolution over time of a network of credit relations among financial agents as a system of coupled stochastic processes. Each process describes the dynamics of individual financial robustness, while the coupling results from a network of liabilities among agents. The average...
Persistent link: https://www.econbiz.de/10012463991
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Accounting for the Rise in Consumer Bankruptcies
Livshits, Igor - 2007
Personal bankruptcies in the United States have increased dramatically, rising from 1.4 per thousand working age population in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive financial intermediaries who can observe households' earnings, age and current asset...
Persistent link: https://www.econbiz.de/10012465287
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Bankruptcy Reform and Credit Cards
White, Michelle J. - 2007
From 1980 to 2004, the number of personal bankruptcy filings in the United States increased more than five-fold, from 288,000 to 1.5 million per year. Lenders responded to the high filing rate with a major lobbying campaign for bankruptcy reform that led to the adoption in 2005 of the Bankruptcy...
Persistent link: https://www.econbiz.de/10012465386