Search Results - subject:"Borrowing constraints"

Collateralized Debt as the Optimal Contract

Lacker, Jeffrey - In: Review of Economic Dynamics 4 (2001) 4, pp. 842-859

In a multiple-good risk-sharing environment with ex post private information, conditions are found under which collateralized debt is the optimal contract. The necessary and sufficient condition is that the borrower values the collateral good more highly than does the lender; otherwise the...

Persistent link: https://www.econbiz.de/10005090982

Equilibrium and Welfare in Markets with Financially Constrained Arbitrageurs

Gromb, Denis; Vayanos, Dimitri - C.E.P.R. Discussion Papers - 2001

We propose a multi-period model in which competitive arbitrageurs exploit discrepancies between the prices of two identical risky assets, traded in segmented markets. Arbitrageurs need to collateralize separately their positions in each asset, and this implies a financial constraint limiting...

Persistent link: https://www.econbiz.de/10005666703

Wealth Distribution and Self-Employment in a Developing Economy

Mesnard, Alice; Ravallion, Martin - C.E.P.R. Discussion Papers - 2001

The extent of entrepreneurial activity in an economy with poorly developed capital markets depends on the distribution of wealth, though in potentially complex ways. A non-parametric model of the wealth effect on self-employment is estimated using micro data on the occupational choices of return...

Persistent link: https://www.econbiz.de/10005124477

Optimal tax and debt policy with endogenously imperfect creditworthiness

Aizenman, Joshua; Gavin, Michael; Hausmann, Ricardo - In: The Journal of International Trade & Economic Development 9 (2001) 4, pp. 367-395

This paper studies the patterns of optimal tax rates and borrowing in a developing country characterized by a costly tax collection. Its access to the international credit market is determined by the efficiency of the tax system, the relative bargaining power of creditors, and the outstanding...

Persistent link: https://www.econbiz.de/10009219564

Private Transfers, Borrowing Constraints and the Timing of Homeownership

Guiso, Luigi; Jappelli, Tullio - C.E.P.R. Discussion Papers - 1998

The 1991 Italian Survey of Household Income and Wealth contains detailed information on how respondents acquired their main residence and any other real estate. This information is used to estimate the impact of inter vivos transfers on the saving period required to purchase a house and on the...

Persistent link: https://www.econbiz.de/10005504649

Education and Borrowing Constraints: Tests Vs. Prices

Fernández, Raquel - C.E.P.R. Discussion Papers - 1998

This paper examines the properties of exams and markets as alternative allocation devices under borrowing constraints …

Persistent link: https://www.econbiz.de/10005497883

Borrowing Constraints, Portfolio Choice, and Precautionary

Haliassos, Michael; Hassapis, Christis - EconWPA - 1998

This paper studies effects of two classes of borrowing constraints, collateral- and income-based, on wealth …

Persistent link: https://www.econbiz.de/10005412592

To Each According To...? Markets, Tournaments, and the Matching Problem with Borrowing Constraints

Fernández, Raquel; Galí, Jordi - C.E.P.R. Discussion Papers - 1997

We compare the performance of markets and tournaments as allocative mechanisms in an economy with borrowing constraints … higher aggregate consumption because of the waste associated with the production of signals under tournaments. When borrowing … constraints are present, however, tournaments dominate markets in terms of aggregate output and, for sufficiently powerful …

Persistent link: https://www.econbiz.de/10005656414

Optimal Consumption/Investment Policies with Undiversifiable Income Risk and Borrowing Constraints

Munk, Claus - EconWPA - 1997

We examine the optimal consumption and portfolio choice of an investor having an initial wealth endowment and an uncertain stream of income from non-traded assets. The income stream is not spanned by traded assets, and the investor is not allowed to borrow against future income, so the financial...

Persistent link: https://www.econbiz.de/10005561681

To Each According to ...?: Markets, Tournaments, and The Matching Problem with Borrowing Constraints

Fernandez, Raquel; Gali, Jordi - C.V. Starr Center for Applied Economics, Department of … - 1997

Persistent link: https://www.econbiz.de/10005826886