the cost of ex-post inefficiency when there are adverse aggregate shocks to the fundamental quality of collateral … shocks by engaging in collateral liquidations. Financial arbitrage by less leveraged financial intermediaries equilibrates … returns from acquiring collateral at fire-sale prices and returns from real-sector lending, inducing higher lending rates, a …

general equilibrium in finite-horizon economy with heterogeneous agents and collateral constraints. There are two assets in … the economy which can be used as collateral for short-term loans. For the first asset the margin requirement is … presence of collateral constraints leads to strong excess volatility. Thus, a regulation of margin requirements may have …

We assess the quantitative implications of the re-use of collateral on financial market leverage, volatility, and …-use frees up collateral that can be used to back more transactions. Re-use thus contributes to the build-up of leverage and … improve welfare as it enables agents to share risk more effectively. Allowing reuse beyond intermediate levels, however, can …

between risk and uncertainty is implemented by applying the multiple priors framework to beliefs about the probability of …

between risk and uncertainty is implemented by applying the Gilboa-Schmeidler maxmin with multiple priors framework to lenders …