agent is introduced in the economy in order to guarantee existence of a rational expectations equilibrium. …

‘excessive’ risk-taking. Our model is rich enough to include heterogeneous agents, endogenous default, and multiple commodity … phenomenon. Among other results, a non-trivial quantity theory of money is derived, liquidity and default premia co …

The possibility of default limits available liquidity. If the potential default draws nearer, a liquidity crisis may … ensue, causing a crash in asset prices, even if the probability of default barely changes, and even if no defaults … subsequently materialize. Introducing default and limited collateral into general equilibrium theory (GE) allows for a theory of …

, securitization and default is contructed in order to explain the2007-2009 U.S. financial crisis. The equilibrium outcome is … characterized by a contagion phenomenonthat commences with increased default in the mortgage sector, and then spreads to the rest of … (default) losses without taking a toll on the taxpayer; margin requirements prevent excess leverage in the housing and …

In this paper we study the properties of general equilibrium with default in economies with incomplete markets. It is … default and promised returns. An analysis of equilibrium in the case of economies with two homogeneous types of agents is also … presented, from which it can be deduced that in equilibrium under partial default the personal valuations of default for the …

In the real economic world, we often suffer from the default risk—the present financial crisis could serve as an … evidence. The long established idea for inhibiting the default behavior is to resort to collateral, and this idea has profound … effect on the market equilibrium. To study this effect, we make an investigation of the economy wherein default risk is …

In this paper we examine the effects of default and collateral on risk sharing. We assume that there is a large set of … agents default, the assets have different payoffs, and there are as many linearly independent assets available for trade as …