Search Results - subject:"debt constraints"

Indeterminacy of Competitive Equilibrium with Risk of Default

Bloise, Gaetano; Reichlin, Pietro; Tirelli, Mario - C.E.P.R. Discussion Papers - 2009

We prove indeterminacy of competitive equilibrium in sequential economies, where limited commitment requires the endogenous determination of solvency constraints preventing debt repudiation (Alvarez and Jermann (2000)). In particular, we show that, for any arbitrary value of social welfare in...

Persistent link: https://www.econbiz.de/10008566321

Endogenous debt constraints in a life-cycle model with an application to social security

Andolfatto, David; Gervais, Martin - In: Journal of Economic Dynamics and Control 32 (2008) 12, pp. 3745-3759

the impact of a payroll financed social security system to illustrate the role of endogenous debt constraints and compare … our results to a model with exogenous debt constraints. Whereas the aggregate effects are similar under both types of …

Persistent link: https://www.econbiz.de/10008462556

Asset price fluctuations without aggregate shocks

Azariadis, Costas; Kaas, Leo - 2007

We analyze the pricing of a productive asset in a class of dynamic exchange economies with heterogeneous, infinitely-lived agents, and self-enforcing intertemporal trades. Individual incomes fluctuate and are correlated; preferences, dividends and aggregate income are fixed. Almost all economies...

Persistent link: https://www.econbiz.de/10009471638

Human Capital Investment and Debt Constraints

Andolfatto, David; Gervais, Martin - In: Review of Economic Dynamics 9 (2006) 1, pp. 52-67

When young individuals face binding debt constraints, their human capital investments will be insufficiently financed …-to-grave policy depends crucially on the assumption of an exogenous debt constraint. If debt constraints arise endogenously for … taking seriously the reasons for why debt constraints exist. (Copyright: Elsevier) …

Persistent link: https://www.econbiz.de/10005090996

On the Interaction of Financial Frictions and Fixed Capital Adjustment Costs: Evidence from a Panel of German Firms

Bayer, Christian - EconWPA - 2004

This paper analyzes the interaction of financial frictions and non- convex adjustment costs. With non-convex adjustment costs firms infrequently carry out discrete investment projects. Therefore, financial variables may influence investment in two ways. Theoretically, they can alter the...

Persistent link: https://www.econbiz.de/10005561248