with collateralized loans, trade in fiat money and production. Long-term nominal loans are backed by collateral, the value … collateral to face value of the loan. Default results in foreclosure, higher borrowing costs, inefficient investment and a … decrease in total output. We show that pre-crisis contractionary monetary policy interacts with Fisherian debt …

buys goods and goods buy money, but goods do not buy goods. (2) Money is always debt; it cannot be a commodity from the … first proposition because, if it were, that would mean that a particular good is buying goods. (3) Default on debt is …

We use a simple model of investment and external finance to analyze the relationship among the issuance of securities …, financial market valuations and, alternatively, aggregate investment or cash flows. We find that issuance is driven by market … valuations, and does not influence aggregate investment, whereas investment has a negative impact on equity issuance. Moreover …

Euro Area being permanently impaired. The risk relates mostly to the prolonged period of stalled investment and persistent … unemployment, with its detrimental effect on human capital. In addition, paying off past debt will be painful to both the public …

This paper addresses the relationship between debt and interest rates within the context of the European Monetary Union …

rates and in?ation rates on debt levels independent of borrowing -for the evolution of household debt in the U.S. over a … long time horizon (1929- 2011). Adapting a standard decomposition of public debt to household sector debt, we show that … these factors have been important in explaining rising debt levels, especially in the past thirty years. We identify and …

economic activity. The basic premise of classical banking theory is that transactions are typically paid for by incurring debt …, and that the role of the banking system is the monetization of this transaction-based debt. In this framework bank … liabilities are the principal form of money, and they circulate because they are backed by debt that can be repaid by depositing …

.  Secondly, the optimal neutrality of government spending is robust to the issuance of public debt.  In the presence of debt …