Long-lived Collateralized Assets and Bubbles

Aloisio Araujo, Mario Pascoa and Juan Pablo Torres-Martinez

Working Papers from University of Chile, Department of Economics

Abstract: When infinite-lived agents trade long-lived assets secured by durable goods, equilibrium exists without any additional debt constraints or uniform impatience conditions on agents' characteristics. Also, regardless of whether assets' net supply is positive or zero, price bubbles are absent when physical endowments are uniformly bounded away from zero. Otherwise, bubbles may occur, even for assets in persistently positive net supply and for deflators yielding finite present values of aggregate wealth.

Keywords: Collateralized assets; Existence of equilibrium; Asset pricing bubbles. (search for similar items in EconPapers)
JEL-codes: D50 D52 (search for similar items in EconPapers)
Date: 2008-07
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Long-lived collateralized assets and bubbles (2011)
Working Paper: Long-lived collateralized assets and bubbles (2010)
Working Paper: Long-lived collateralized assets and bubbles (2007)
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