The Leverage Cycle
John Geanakoplos ()
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John Geanakoplos: Cowles Foundation, Yale University, http://economics.yale.edu/people/john-geanakoplos
No 1715R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
Equilibrium determines leverage, not just interest rates. Variations in leverage cause fluctuations in asset prices. This leverage cycle can be damaging to the economy, and should be regulated.
Keywords: Leverage; Collateral; Cycle; Crisis; Regulation (search for similar items in EconPapers)
JEL-codes: E3 E32 G01 G12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cba, nep-mac and nep-reg
Date: 2009-07, Revised 2010-01
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Published in D. Acemoglu, K. Rogoff and M. Woodford, eds., NBER Macroeconomics Annual 2009. Chicago: University of Chicago Press, vol. 24, pp. 1-65
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