The Leverage Cycle

John Geanakoplos ()
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John Geanakoplos: Cowles Foundation, Yale University, http://cowles.econ.yale.edu/faculty/geanakoplos.htm

No 1715, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: Equilibrium determines leverage, not just interest rates. Variations in leverage cause fluctuations in asset prices. This leverage cycle can be damaging to the economy, and should be regulated.

Keywords: Leverage; Collateral; Cycle; Crisis; Regulation (search for similar items in EconPapers)
JEL-codes: E3 E32 G01 G12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2009-07
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