Collateral constraints and rental markets

d’Albis, Hippolyte and Eleni Iliopulos
Authors registered in the RePEc Author Service: Hippolyte d'Albis

Economics Letters, 2013, vol. 121, issue 3, 436-439

Abstract: We study a benchmark model with collateral constraints and heterogeneous discounting. Contrarily to a rich literature on borrowing limits, we allow for rental markets. By incorporating this missing market, we show that impatient agents choose to rent rather than to own the collateral in the neighborhood of the deterministic steady state. Consequently, impatient agents are not indebted and borrowing constraints play no role in local dynamics.

Keywords: Heterogeneous discounting; Collateral constraints; Rental market; Credit market (search for similar items in EconPapers)
JEL-codes: E30 R31 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Collateral constraints and rental markets (2013)
Working Paper: Collateral constraints and rental markets (2013)
Working Paper: Collateral constraints and rental markets (2013)
Working Paper: Collateral constraints and rental markets (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:3:p:436-439

DOI: 10.1016/j.econlet.2013.09.013

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