Credit Cycles Redux


  • Working Papers


  • Theoretical studies have shown that under unorthodox assumptions on preference and production technologies, collateral constraints can act as a powerful amplification and propagation mechanism of exogenous shocks. We investigate whether or not this result holds under more standard assumptions. We find that collateral constraints generate a typically small output amplification. Large amplification is a knife-edge type of result.

fecha de publicación

  • 2002-09

Líneas de investigación

  • Business Cycles
  • Collateral Constraints
  • Heterogeneous Agents


  • julio 2002