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Is collateralised borrowing an amplification mechanism?

Meeks, R (2004) Is collateralised borrowing an amplification mechanism? UNSPECIFIED. Money Macro and Finance Research Group.

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The eff?ect of permitting collateralised borrowing in an otherwise standard business cycle model is examined. We find that powerful income e?ffects cause consumption to be far more volatile than in the standard model, and cause far higher demand for leisure following a positive productivity shock than is usual. These e?ffects are shown to inhibit capital accumulation and are capable of dampening the response of output to technology shocks. There are implications for existing models with credit market imperfections that abstract from labour supply behaviour.

Item Type: Monograph (UNSPECIFIED)
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 07 Jan 2013 16:53
Last Modified: 17 Aug 2017 18:04

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