Revistas Académicas WoS

Equilibrium with limited-recourse collateralized loans

We address a general equilibrium model with limited-recourse collateralized loans and securitization of debts. Each borrower is required to pledge physical collateral, and bankruptcy is filed against him if claims are not fully honored. Moreover, agents have a positive amount of wealth exempt from garnishment and, for at least a fraction of them, commodities used as collateral are desirable. In this context, equilibrium exists for any continuous garnishment rule and multiple types of reimbursement mechanisms.

Economic Theory, Vol. 53, pp. 181 - 211, 2013
Autor(es): Poblete-Cazenave, Rubén, Torres-Martínez Juan Pablo