model with collateral. This paper develops a general-equilibrium framework to explore QE's international transmission … involving an advanced economy (AE) and an emerging market economy (EM) whose assets have less collateral capacity. Capital flows … arise as a result of international sharing of scarce collateral. The crucial insight is that private AE agents adjust their …

model with collateral. This paper develops a general-equilibrium framework to explore QE's international transmission … involving an advanced economy (AE) and an emerging market economy (EM) whose assets have less collateral capacity. Capital flows … arise as a result of international sharing of scarce collateral. The crucial insight is that private AE agents adjust their …

of the financial crisis in 2008. Such collateralized debt markets have both collateral price channel and counterparty … of contagion by endogenizing leverage (margin), asset prices, and network formation. Agents face a tradeoff between … leverage and counterparty risk. Diversification of counterparty risk generates positive externalities by reducing systemic risk …

This paper investigates contagion in financial networks through both debt and collateral markets. Payment from a … collateralized debt contract depends not only on the borrower's balance sheet but also on the price of the underlying collateral. I … show that the existence of the collateral channel of contagion amplifies the contagion from the counterparty channel, and …

We discuss how leverage can be monitored for institutions, individuals, and assets. While traditionally the interest … rate has been regarded as the important feature of a loan, we argue that leverage is sometimes even more important …. Monitoring leverage provides information about how risk builds up during booms as leverage rises and how crises start when …

There continues to be substantial interest in models combining heterogeneous beliefs about asset values with leverage … forward by the borrower. We show that in a continuous state version of a model of collateral equilibrium with high initial … leverage, most of the burden of adjustment to increases in such risk are borne by an increase in the interest spread and not …

, which enables increased leverage and investment. In the absence of frictions in the securitization process, we show that the … idiosyncratic and aggregate shocks. We focus on the role of securitization, whereby borrowers can reduce idiosyncratic asset risk …-investment. We examine policies to correct over-investment and find that a leverage ratio restriction generates a Pareto improvement …

leverage and collateral equilibrium: endogenous leverage can be highly volatile, but it is always easy to compute. The … possibility of default can have a dramatic effect on equilibrium, if collateral is scarce, yet we prove the No-Default Theorem …

leverage and collateral equilibrium: endogenous leverage can be highly volatile, but it is always easy to compute. The … possibility of default can have a dramatic effect on equilibrium, if collateral is scarce, yet we prove the No-Default Theorem …

-default equilibria would be selected if there were the slightest cost of using collateral or handling default. Our Binomial Leverage …Our paper provides a complete characterization of leverage and default in binomial economies with financial assets … serving as collateral. Our Binomial No-Default Theorem states that any equilibrium is equivalent (in real allocations and …