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Cross-border financial flows arise when (otherwise identical) countries differ in their abilities to use assets as collateral to back financial contracts. Financially integrated countries have access to the same set of financial instruments, and yet there is no price convergence of assets...
Persistent link: https://www.econbiz.de/10012891602
Cross-border financial flows arise when (otherwise identical) countries differ in their abilities to use assets as collateral to back financial contracts. Financially integrated countries have access to the same set of financial instruments, and yet there is no price convergence of assets with...
Persistent link: https://www.econbiz.de/10012891783
Cross-border financial flows arise when (otherwise identical) countries differ in their abilities to use assets as collateral to back financial contracts. Financially integrated countries have access to the same set of financial instruments, and yet there is no price convergence of assets with...
Persistent link: https://www.econbiz.de/10012479536
Persistent link: https://www.econbiz.de/10011999804
Persistent link: https://www.econbiz.de/10011977428
Persistent link: https://www.econbiz.de/10011996887
This is the first paper to test the asset pricing implication of leverage in a laboratory. We show that as theory predicts, leverage increases asset prices: When an asset can be used as collateral (that is, when the asset can be bought on margin), its price goes up. This increase is significant,...
Persistent link: https://www.econbiz.de/10009523387
We develop a model of leverage that is amenable to laboratory implementation and gather experimental data. We compare two identical economies: in one economy, agents cannot borrow; in the other, they can leverage a risky asset to issue debt. Leverage increases asset prices in the laboratory....
Persistent link: https://www.econbiz.de/10012843065
Persistent link: https://www.econbiz.de/10012599974
We develop a model of leverage that is amenable to laboratory implementation and gather experimental data. We compare two identical economies: in one economy, agents cannot borrow; in the other, they can leverage a risky asset to issue debt. Leverage increases asset prices in the laboratory....
Persistent link: https://www.econbiz.de/10012479225