Bubbles and Credit Constraints
| Title: | Bubbles and Credit Constraints |
|---|---|
| Authors: | Jianjun Miaoy; Pengfei Wangz; Jel Codes E; We Thank Bruno Biais; Toni Braun; Markus Brunnermeier; Henry Cao; Christophe Chamley; Tim Cogley; Russell Cooper; Douglas Gale; Mark Gertler; Simon Gilchrist; Christian Hellwig; Hugo Hopenhayn; Eric Leeper; Zheng Liu; Gustavo Manso; Ramon Marimon; Erwan Morellec; Fabrizio Perri; Jean-charles Rochet; Tom Sargent; Jean Tirole; Jon Willis; Mike Woodford; Tao Zha; Lin Zhang; Wei Xiong |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://people.bu.edu/miaoj/Bubble.pdf. |
| Publication Year: | 2010 |
| Collection: | CiteSeerX |
| Subject Terms: | Credit-Driven Bubbles; Credit Constraints; Asset Price; Arbitrage; Q The- ory; Liquidity; Multiple Equilibria |
| Description: | We provide an in nite-horizon model of a production economy with credit-driven stock-price 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 in rm value can exist to relax credit constraints and improve investment e ¢ ciency. We provide conditions under which bubbles can coexist with other types of assets. We show that the collapse of bubbles leads to a recession and a stock market crash. There is a government policy that can |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.469.3573; http://people.bu.edu/miaoj/Bubble.pdf |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.469.3573; http://people.bu.edu/miaoj/Bubble.pdf |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.ADE72896 |
| Database: | BASE |