On the amplification role of collateral constraints

Caterina Mendicino

Economics Letters, 2012, vol. 117, issue 2, 429-435

Abstract: This letter explores the role of costly liquidation of the collateralized asset in a stochastic version of the Kiyotaki and Moore (1997) model. We document that the degree of inefficiency in the debt enforcement procedure plays a key role in the endogenous amplification of productivity shocks generated by collateral constraints.

Keywords: Business cycle; Debt enforcement procedures; Endogenous borrowing limits (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: On the amplification role of collateral constraints (2011)
Working Paper: On the Amplification Role of Collateral Constraints (2009)
Working Paper: On the Amplification Role of Collateral Constraints (2008)
Working Paper: On the amplification role of collateral constraints (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:2:p:429-435

DOI: 10.1016/j.econlet.2012.06.007

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