output comes from an unusual regime. -- Bubbles ; fiscal theory of the price level ; collateral constraints ; neutrality …This paper proposes and tests a theory of credit-driven asset bubbles which are neutral in their real effects. When a … lender such as a government, central bank, or banking sector is willing to lend infinitely against collateral, explosive …

financial frictions and labor demand, as in Jermann and Quadrini (2012), is key to the result. A collateral constraint a la …

market, this paper studies an endogenous one in a general equilibrium model. To achieve this, a natural instrument is … collateral, because its value is associated with the conditional liquidation price. In the economy, all agents are endowed with a … used as collateral to borrow from banks to finance private investments. The collateral value and amount of borrowing are …