We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …

transfer ; credit derivatives ; public and private information ; access to credit ; bank competition …

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having … defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information … about a firm's type to its competitors. Thereby, asymmetric information between banks is reduced and bank competition …