Ponzi Schemes, Equilibrium and the Elasticity of Credit Constraints
نویسنده
چکیده
This paper shows equilibrium existence for an infinite–horizon exchange economy with incomplete markets of real assets when default is allowed. Borrowers are required to constitute collateral in terms of durable goods and face credit constraints that depend on their past default. When credit constraints are inelastic, Ponzi schemes are ruled out and an equilibrium exists. JEL Classification: D52, D91.
منابع مشابه
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