general equilibrium in finite-horizon economy with heterogeneous agents and collateral constraints. There are two assets in … the economy which can be used as collateral for short-term loans. For the first asset the margin requirement is … presence of collateral constraints leads to strong excess volatility. Thus, a regulation of margin requirements may have …

We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite …-horizon asset-pricing model with heterogeneous agents. In our model, the ability of agents to reuse frees up collateral that can be …