We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence … a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give … rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally …

We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence … a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give … rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally …

We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence … a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give … rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally …

This paper develops a notion of consumer confidence within a dynamic competitive equilibrium framework. In any …, confidence is encoded in the subjective probabilities consumers attach to these multiple future outcomes. Our approach … faced by consumers. We use the structure of an economy with collateralized household debt and housing markets to develop and …

through which financial system uncertainty affects household decisions. …