Geanakoplos, John; Fostel, Ana - In: American Economic Review 98 (2008) 4, pp. 1211-44
We provide a pricing theory for emerging asset classes, like emerging markets, that are not yet mature enough to be attractive to the general public. We show how leverage cycles can cause contagion, flight to collateral, and issuance rationing in a frequently recurring phase we call the anxious...