to smooth consumption over time and because they provide collateral and liquidity services. We characterize a recursive … and contemporaneous costs due to lost collateral and liquidity are essential to generate these empirically plausible …

This paper addresses the following questions. Is there evidence of financial contagion in the Eurozone? To what extent … matter concerning the Euro Zone. Second, differences in vulnerability to contagion within the Eurozone are even more … remarkable: the core Eurozone members become less vulnerable to EUZ contagion, possibly due to a safe-heaven effect, while …

This paper studies under what circumstances creditworthy sovereign borrowers may be denied liquidity by rational … become self-fulfilling, and the borrower experiences a liquidity crisis. Multiple equilibria can be avoided by marketing the … loan appropriately or by developing a reputation for following good policies. Liquidity problems can also arise because of …