productive value ex-post. The average quality of assets is the key state variable of the economy. High asset prices today attract … assets and asset prices. Productive and lemon assets therefore exhibit predator-prey dynamics, and the quality of assets …

affect the quality of the borrower pool faced by financial intermediaries. We find that if the economy is hit by an …

the quality of securitized loans. In this theoretical model, I show that, in general, by providing reputation …-based implicit recourse, the issuer of a loan can credibly signal its quality. However, in boom stages of the business cycle …, information on loan quality remains private, and lower quality loans accumulate on balance sheets. This deepens a subsequent …