search query: @indexterm CREDIT MARKETS / total: 99
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| Author: | Kiyotaki, N. Moore, J. |
| Title: | Credit cycles |
| Journal: | Journal of Political Economy
1997 : APR, VOL. 105:2, p. 211-248 |
| Index terms: | CREDIT ASSETS CREDIT MARKETS MODELS |
| Language: | eng |
| Abstract: | In this article a model of dynamic economy in which lenders can't force borrowers to pay their debts back unless they are secured, is constructed. In this economy durable assets are factors of production and they also serve as collateral for loans. The interaction between credit limits and asset prices seems to be a powerful transmission mechanism by which the effects of shocks persist, amplify and spill over the other sectors. Small, temporary shocks to technology or income distribution generate large, persistent fluctuations in output and asset prices. |
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