This paper presents a microfounded model of money where durable assets serve as a guarantee to repay consumption loans. We study a steady state equilibrium where money and credit coexist. In such an equi- librium, a larger investment in durable capital relaxes the borrowing constraint faced by consumers. We show that the occurrence of over-investment and the behavior of capital accumulation depend on the rate of inflation, the relative risk aversion of agents and the marginal productivity of the capital goods.

Ferraris, L., & Watanabe, M. (2008). Collateral secured loans in a monetary economy. JOURNAL OF ECONOMIC THEORY, 143(1), 405-424 [10.1016/j.jet.2008.02.002].

Collateral secured loans in a monetary economy

FERRARIS, LEO
;
2008

Abstract

This paper presents a microfounded model of money where durable assets serve as a guarantee to repay consumption loans. We study a steady state equilibrium where money and credit coexist. In such an equi- librium, a larger investment in durable capital relaxes the borrowing constraint faced by consumers. We show that the occurrence of over-investment and the behavior of capital accumulation depend on the rate of inflation, the relative risk aversion of agents and the marginal productivity of the capital goods.
Si
Articolo in rivista - Articolo scientifico
Scientifica
Collateral; Money; Search
English
405
424
20
Ferraris, L., & Watanabe, M. (2008). Collateral secured loans in a monetary economy. JOURNAL OF ECONOMIC THEORY, 143(1), 405-424 [10.1016/j.jet.2008.02.002].
Ferraris, L; Watanabe, M
File in questo prodotto:
File Dimensione Formato  
YJETH3604.pdf

Solo gestori archivio

Dimensione 548.29 kB
Formato Adobe PDF
548.29 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/311136
Citazioni
  • Scopus 25
  • ???jsp.display-item.citation.isi??? 24
Social impact