asset side and equity capital as well as debt on the liabilities side. A number of findings emerge when simulating the model … higher levels of leverage lead to a greater inequality among agents. Furthermore, greater leverage increases the frequency of … bankruptcies and systemic events. Credit frictions, which we define as the stickiness of debt adjustments, are able to explain a …

market financing, debt or equity financing - seems to be particularly harmful or beneficial for growth. …

negatively related to credit spreads. Particularly during the financial crisis of 2007-09 and the subsequent European debt crisis …

Broker-dealer leverage has recently proven to be strongly procyclical, exhibiting impressive explanatory power for a … balance-sheet indicators for asset pricing. In particular, leverage shows a procyclical behavior with a positive price of risk …. Moreover, high leverage coincides with high asset prices, thereby forecasting lower future returns. …