How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble …

financial institutions require collateral (the extensive margin) and (2) the collateral value relative to the loan value (the … intensive margin). On the first aspect, it finds that collateral borrowing is prevalent. On average, 73 percent of loans from … financial institutions require collateral. Firms that are small or sell domestically are significantly less likely to pledge …