This paper explores the role of inefficiencies in the debt enforcement procedures for the amplification of productivity and credit market shocks. We argue that the magnitude of amplification crucially depends on the fraction of the asset used as a collateral in the credit market.

This paper analyzes housing market boom-bust cycles driven by changes in households' expectations. We explore the role of expectations not only on productivity but on several other shocks that originate in the housing market, the credit market and the conduct of monetary policy. We find that, in...

This paper investigate how the degree of credit market development is related to business cycle fluctuations in industrialized countries. I show that a business cycle model with collateral constraints generate a negative relation between the volatility of the cyclical component of output and the...