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A Note on learning in a credit economy

Kuang, Pei (2014) A Note on learning in a credit economy. Discussion Paper. University of Birmingham, Birmingham.

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This paper studies the interaction of agents' collateral price beliefs, credit constraint and aggregate economic activity over the business cycle. Learning strengthens the role of collateral constraints in aggregate fluctuations. Under heterogeneous learning rules, numerical simulations illustrate that bankruptcy on the part of borrowers arises sooner as they track the economy faster.

Type of Work:Monograph (Discussion Paper)
School/Faculty:Colleges (2008 onwards) > College of Social Sciences
Number of Pages:19
Date:17 September 2014
Series/Collection Name:Birmingham Business School Discussion Paper Series
Keywords:Learning, Collateral Constraint, Bankruptcy, Heterogeneity
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Copyright Status:The discussion paper is copyright of the University, the author and/or third parties. The intellectual property rights in respect of this work are defined by the The Copyright Designs and Parents Act 1988 or as modified by any successor legislation. Any use made of information contained in this paper must be in accordance with theta legislation and must be properly acknowledged. Copies of the paper may be distributed and quotations used for research and study purposes, with due attribution. However, commercial distribution or reproduction in any format is prohibited without the permission of the copyright holder.
Copyright Holders:The Authors and University of Birmingham
ID Code:1928

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