No. This paper overturns the conventional wisdom in a dynamic model of financial markets where information is linked intertemporally: more information today affects the volatility of resale asset prices in the future. This dynamic complementarity gives rise to multiple information equilibria....

We build a model of endogenous credit cycles arising from the dynamics of adverse selection. Heterogeneous entrepreneurs trade productive assets in an anonymous market subject to financial frictions. Cream-skimming rent-seekers create lemon assets that can be traded. Lemon assets are...