Showing 1 - 10 of 18
We study general equilibrium with nonconvexities. In these economies there exist sunspot equilibria without the usual assumptions needed in convex economies, and they have good welfare properties. Moreover, in these equilibria, agents act as if they have quasi-linear utility. Hence wealth...
Persistent link: https://www.econbiz.de/10004977942
This paper models the role of assets in facilitating intertemporal exchange: because limited commitment precludes unsecured credit, buyers need to pledge assets as collateral. We develop a general equilibrium model where assets differ in terms of pledgability, and put it to work in applications...
Persistent link: https://www.econbiz.de/10011079995
We study economies where houses, in addition to providing utility as shelter, may also facilitate credit transactions, since home equity can be used as collateral. We document there were big increases in home-equity-backed consumption loans coinciding with the start of the house price boom, and...
Persistent link: https://www.econbiz.de/10011080055
reneging on obligations.
Persistent link: https://www.econbiz.de/10011080485
parameters optimal; for other parameters, strictly positive rates (inflation above the Friedman Rule) are optimal.
Persistent link: https://www.econbiz.de/10011081144
We study models of credit with limited commitment, which implies endogenous borrowing constraints. We show that there are multiple stationary equilibria, as well as nonstationary equilibria, including some that display deterministic cyclic and chaotic dynamics. There are also stochastic...
Persistent link: https://www.econbiz.de/10011081458
We study economies with an essential role for liquid assets in transactions. The model can generate multiple stationary equilibria, across which asset prices, market participation, capitalization, output and welfare are positively related. It can also generate a variety of nonstationary...
Persistent link: https://www.econbiz.de/10011081490
We study bilateral exchange, both direct trade, and indirect trade that happens through chains of intermediaries, or middlemen. We develop a model of this activity and present a sequence of applications. We illustrate how, and how many, intermediaries get involved, and how the terms of trade are...
Persistent link: https://www.econbiz.de/10011081591
Housing, in addition to providing direct utility, facilitates credit transactions when home equity serves as collateral. We document big increases in home-equity loans coinciding with the start of the house-price boom, and suggest an explanation. When it is used as collateral, housing can bear a...
Persistent link: https://www.econbiz.de/10011081682
This paper integrates search-based models of marriage and money. We think about households as organizations, the way Coase thinks about firms, as alternatives to markets that become more attractive when transactions costs increase. In the model, individuals consume market- and home-produced...
Persistent link: https://www.econbiz.de/10011081980