We decompose aggregate consumption by modelling both savers and their links to collateral constrained borrowers through … proportion to the riskiness of assets, the demand for loans, the asset price and the quantity of housing collateral. We show that …

coming to this answer we construct a model with reproducible capital and collateral constraints within two setups, a closed …

is countercyclical. As a result, theory implies a negative collateralizability premium; that is, capital that can be used … as collateral to relax financial constraints provides insurance against aggregate shocks and commands a lower risk …