We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower … aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation …

more favourable loan package; that it is associated with over-investment even when investment does not create collateral …

utility function whose arguments are consumption and investment. They desire to accumulate wealth for its own sake - this is …

The current extensive literature on irreversible investment decisions makes the assumption of constant interest rate … investment project. Given the generality of the considered valuation problem, we first provide a thorough mathematical … interest rate variability may have a profound decelerating or accelerating impact on investment demand depending on whether the …