A Note on Learning in a Credit Economy

Pei Kuang

Discussion Papers from Department of Economics, University of Birmingham

Abstract: This paper studies the interaction of agents' collateral price beliefs, credit constraint and aggregate economic activity over the business cycle. Learning strengthens the role of collateral constraints in aggregate fluctuations. Under Heterogeneous learning rules, numerical simulations illustrate that bankruptcy on the part of borrowers arises sooner as they track the economy faster.

Keywords: Learning; Collateral Constraint; Bankruptcy; Heterogeneity (search for similar items in EconPapers)
JEL-codes: D83 E44 G14 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-12
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://repec.cal.bham.ac.uk/pdf/14-08.pdf

Related works:
Journal Article: A NOTE ON LEARNING IN A CREDIT ECONOMY (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:14-08

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