Collateral constraints and rental markets

Hippolyte d'Albis and Eleni Iliopulos

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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.; credit market (search for similar items in EconPapers)
Date: 2013-12-01
New Economics Papers: this item is included in nep-ure
Note: View the original document on HAL open archive server: https://hal.science/hal-00964867v1
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Citations: View citations in EconPapers (5)

Published in Economics Letters, 2013, 121, pp.436-439. ⟨10.1016/j.econlet.2013.09.013⟩

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Journal Article: 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:hal:journl:hal-00964867

DOI: 10.1016/j.econlet.2013.09.013

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