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Author Jianjun Miao, Y. ♦ Pengfei Wang, Z. ♦ Cooper, Russell ♦ Gale, Douglas ♦ Gertler, Mark ♦ Gilchrist, Simon ♦ Hellwig, Christian ♦ Hopenhayn, Hugo ♦ Jovanovic, Boyan ♦ King, Bob ♦ Kiyotaki, Nobu ♦ Korinek, Anton ♦ Kubler, Felix ♦ Lansing, Kevin ♦ Leahy, John ♦ Leeper, Eric ♦ Liu, Zheng ♦ Manso, Gustavo ♦ Marimon, Ramon ♦ Morellec, Erwan ♦ Perri, Fabrizio ♦ Rochet, Jean-Charles
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Credit Constraint ♦ Endogenous Credit Constraint ♦ Nite-horizon Model ♦ Bubble Lead ♦ Productive Asset ♦ Credit-driven Stockprice Bubble ♦ Production Economy ♦ Stochastic Investment Opportunity ♦ Investment Ciency ♦ Stock Market Crash
Abstract We provide an in…nite-horizon model of a production economy with credit-driven stockprice bubbles, in which …rms meet stochastic investment opportunities and face endogenous credit constraints. Firms have limited commitment to repay debt. Credit constraints ensure that default never occurs in equilibrium. We show that bubbles attached to productive assets can exist, which relax credit constraints and improve investment e ¢ ciency. The collapse of bubbles leads to a recession and a stock market crash. We show that there is a
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Publisher Date 2012-01-01