which exchange rate sensitive collateral constraints may bind in some states of the world. The appeal of the model is that … it allows for a complete analytical description of the effects of collateral constraints, and admits a full … monetary policy described above – in particular, that optimal monetary policy may be pro-cyclical under binding collateral …

This paper studies the role of collateral constraints in transforming small monetary shocks into large persistent …

-cycle model where households face collateral constraints that tie their credit capacity to the value of their houses and examine … extract utility from their homes, landlords that obtain rents, and investors. We show that an economy with tighter collateral … constraints is more prone to bubbles which, in turn, tend to have a larger size but are less fragile in face of funddraining …

collateral constraints. Second, credit flows are intermediated by monopolistically competitive banks, thus giving rise to …

-style infinite-horizon exchange economy with hetero- geneous agents and collateral constraints. There are two trees in the economy … collateral constraints and the endogenous margin requirements for the first tree lead to large excess price-volatility of the …