Credit Cycles Redux
Juan Cordoba and
Marla Ripoll ()
Macroeconomics from University Library of Munich, Germany
Theoretical studies have shown that under unorthodox assumptions on preferences and production technologies, collateral constraints can act as a powerful amplification and propagation mechanism of exogenous shocks. We investigate whether or not this result hold under more standard assumptions. We find that collateral constraints generate a typically small output amplification. Large amplification is a "knife- edge" type of result.
Keywords: Credit Constraints; financial constraints; business cycles; heterogenous agents; amplification (search for similar items in EconPapers)
JEL-codes: E32 E44 (search for similar items in EconPapers)
Pages: 35 pages
New Economics Papers: this item is included in nep-dge
Note: Type of Document - pdf; pages: 35 ; figures: included
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Working Paper: Credit Cycles Redux (2010)
Journal Article: CREDIT CYCLES REDUX (2004)
Working Paper: Credit Cycles Redux (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0210004
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