Credit Cycles Redux

Juan Cordoba () and Marla Ripoll
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Marla Ripoll: U of Pittsburgh

Working Papers from Rice University, Department of Economics

Abstract: 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.

JEL-codes: E32 (search for similar items in EconPapers)
Date: 2002-09
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http://www.ruf.rice.edu/~econ/papers/2002papers/07Cordoba.pdf

Related works:
Working Paper: Credit Cycles Redux (2002)
Journal Article: CREDIT CYCLES REDUX (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:ecl:riceco:2002-07

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