Kiyotaki, Nobuhiro; Moore, John - In: Journal of Political Economy 105 (1997) 2, pp. 211-48
The authors construct a model of a dynamic economy in which lenders cannot force borrowers to repay their debts unless the debts are secured. In such an economy, durable assets play a dual role: not only are they factors of production but they also serve as collateral for loans. The dynamic...
