Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145539 
Year of Publication: 
2016
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Financial Frictions No. F12-V2
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel und Hamburg
Abstract: 
We construct a dynamic model economy in which households from segmented markets have varying financial asset demand. Intermediaries make profit by exploiting the price difference in segmented financial markets. However, intermediaries have to separately post their physical investment as collateral to trade. We show that the heterogeneous belief will disturb the intermediaries’ self-recovery process in both financial and real sectors through endogenously determined collateral constraints. The dynamic interaction between belief determined collateral constraint and liquidity supply turns out to be a powerful transmission mechanism by which the effects of shocks persist, amplify and spill over to other sectors.
JEL: 
E44
G01
P43
Document Type: 
Conference Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.