Mendoza, Enrique G.; Boz, Emine - National Bureau of Economic Research (NBER) - 2010
factors behind the U.S. credit crisis. We show that a boom-bust cycle in debt, asset prices and consumption characterizes the …Financial innovation and overconfidence about asset values and the riskiness of new financial products were important … equilibrium dynamics of a model with a collateral constraint in which agents learn \by observation" the true riskiness of a new …