This paper studies a model of credit based on Gu et al. (2013) with limited commitment and endogenous debt limits in a competitive search market. There are deterministic and stochastic cycles even though the fundamentals are deterministic and time invariant. There are also multiple positive...

We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete in a differentiated loan market, hold reserves against liquidity shocks, and refinance in the interbank market. A merger creates an internal money market that induces financial...