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 …

. Financial integration is a way of sharing scarce collateral. The ability of one country to leverage and tranche assets provides …We show that cross-border financial flows arise when countries differ in their abilities to use assets as collateral … for investors in the financially advanced country to invest abroad. Foreign demand for collateral and for collateral …

-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 …

-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 …

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

-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 …

We review the theory of leverage developed in collateral equilibrium models with incomplete markets. We explain how …-sectional implications of multiple leverage cycles, including contagion, flight to collateral, and swings in the issuance volume of the … leverage tends to boost asset prices and create bubbles. We show how leverage can be endogenously determined in equilibrium and …

The literature on leverage until now shows how an increase in volatility reduces leverage. However, in order to explain … pro-cyclical leverage it assumes that bad news increases volatility. This paper suggests a reason why bad news is more … often than not associated with higher future volatility. We show that, in a model with endogenous leverage and heterogeneous …

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 …