Equilibrium with limited-recourse collateralized loans

Rubén Poblete-Cazenave () and Juan Pablo Torres-Martinez

Economic Theory, 2013, vol. 53, issue 1, 211 pages

Abstract: We address a general equilibrium model with limited-recourse collateralized loans and securitization of debts. Each borrower is required to pledge physical collateral, and bankruptcy is filed against him if claims are not fully honored. Moreover, agents have a positive amount of wealth exempt from garnishment and, for at least a fraction of them, commodities used as collateral are desirable. In this context, equilibrium exists for any continuous garnishment rule and multiple types of reimbursement mechanisms. Copyright Springer-Verlag 2013

Keywords: Collateralized assets; Bankruptcy; Limited-recourse loans; D52; D54 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Working Paper: Equilibrium with limited-recourse collateralized loans (2010)
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DOI: 10.1007/s00199-011-0685-8

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