framework we validate recent results in general equilibrium theory about endogenous leverage and its consequences for asset …

leverage by studying a model that simultaneously describes dynamic and equilibrium properties of the market. Rather than taking … important because the economics of leverage is key to the understanding of financial crisis. We find that simulated double … assets are traded at a price above fundamental value in the double auction. The equilibrium level of leverage also emerges in …

higher levels of leverage lead to a greater inequality among agents. Furthermore, greater leverage increases the frequency of … key difference in the relation between leverage and assets observed for different bank types. Lowering credit frictions … leads to an increasingly procyclical behavior of leverage, which is typical for investment banks. Nevertheless, the impact …