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The Macroeconomics of Financial Speculation

Simsek, Alp - 2021

-selling constraints, speculation can generate overvaluation and speculative bubbles. Leverage can substantially inflate speculative … bubbles and leverage limits depend on perceived downside risks. Shifts in beliefs about downside tail scenarios can explain … the emergence and the collapse of leveraged speculative bubbles. Speculative bubbles are related to rational bubbles, but …

Persistent link: https://www.econbiz.de/10013238441

On the Power and Weakness of Rational Expectations : Logical Fallacies, Periodic Bubbles and Business Cycles

Gracia, Eduard - 2012

's q ratio displays regular cycles of bubbles and crashes reflecting an agency problem between investors and producers. The …

Persistent link: https://www.econbiz.de/10013104808

On the power and weakness of rational expectations : logical fallacies, periodic bubbles and business cycles

Gracia, Eduard - 2012

's q ratio displays regular cycles of bubbles and crashes reflecting an agency problem between investors and producers. The … ; financial bubbles ; stock markets ; booms and crashes ; Tobin's q ; business cycles ; economic rents …

Persistent link: https://www.econbiz.de/10009547387

Fundamentals, misvaluation, and investment : the real story

Chirinko, Robert S.; Schaller, Huntley - 2006

; misvaluation, bubbles ; real effects of financial markets …

Persistent link: https://www.econbiz.de/10009736657

Fundamentals, misvaluation, and investment : the real story

Chirinko, Robert S.; Schaller, Huntley - 2006

Persistent link: https://www.econbiz.de/10003425629

Interest Rate Dynamics, Variable-Rate Loan Contracts, and the Business Cycle

Pintus, Patrick A. - 2019

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates forecast booms in GDP, consumption, investment, and employment. We show that a Kiyotaki-Moore...

Persistent link: https://www.econbiz.de/10012903888

Leveraged Borrowing and Boom-Bust Cycles

Pintus, Patrick A. - 2012

Investment booms and asset "bubbles" are often the consequence of heavily leveraged borrowing and speculations of …

Persistent link: https://www.econbiz.de/10013115731

Re-examining the role of financial constraints in business cycles : is something wrong with the credit multiplier?

Olivella, Virginia; Roldán-Peña, Jessica - 2013

Motivated by the apparent failure of the credit multiplier mechanism (CM) to deliver amplification in DSGE models, we re-examine its role in business cycles to address the question: is something wrong with the CM? Our answer is no. In coming to this answer we construct a model with reproducible...

Persistent link: https://www.econbiz.de/10009762039

International credit markets and global business cycles

Pintus, Patrick A.; Wen, Yi; Xin, Xiaochuan - 2018 - This version: May 14, 2018

This paper stresses a new channel through which global financial linkages contribute to the co-movement in economic activity across countries. We show in a two-country setting with borrowing constraints that international credit markets are subject to self-fulfilling variations in the world real...

Persistent link: https://www.econbiz.de/10011911509

Collateral, Leverage, and the Business Cycle

Xing, Xiaochuan - 2022

I construct an infinite-horizon dynamic stochastic general equilibrium model with a collateral constraint and actual default in equilibrium. Entrepreneurs borrow from households through non-recourse debt contracts backed by capital goods. By taking into account the non-linear payoffs of the...

Persistent link: https://www.econbiz.de/10013406066