We assess the quantitative implications of the re-use of collateral on financial market leverage, volatility, and … significantly increases volatility in financial markets. When introducing limits on re-use, we find that volatility is strictly …

We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite … used to back more transactions. Re-use thus contributes to the buildup of leverage and significantly increases volatility in … financial markets. When introducing limits on re-use, we find that volatility is strictly decreasing as these limits become …

In this paper we examine the quantitative effects of margin regulation on volatility in asset markets. We consider a … presence of collateral constraints leads to strong excess volatility. Thus, a regulation of margin requirements may have … in the regulation of one class of assets may have only small effects on these assets' return volatility if investors have …

We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite … used to back more transactions. Re-use thus contributes to the buildup of leverage and significantly increases volatility … in financial markets. When introducing limits on re-use, we find that volatility is strictly decreasing as these limits …

nonlinear external habits can rationalize the evidence, and it implies that the competitive volatility of consumption is … volatility (a targeting of risk premia) rather than on filling the gap between consumption and its flexible-price counterpart …

the central bank should prioritize removing consumption volatility (a targeting of risk premia) over filling the gap …

rate by amplifying the volatility of the economy; and 3) the welfare gain of stabilization policy can be enormous (e.g., as …