Learning in a Credit Economy

Tiziana Assenza, Michele Berardi

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

9 Citazioni (Scopus)

Abstract

In this paper we analyze a credit economy à la Kiyotaki and Moore [1997 "Credit cycles" Journal of Political Economy 105, 211–248] enriched with learning dynamics, where both borrowers and lenders need to form expectations about the future price of the collateral. We find that under homogeneous learning, the MSV REE for this economy is E-stable and can be learned by agents, but when heterogeneous learning is allowed and uncertainty in terms of a stochastic productivity is added, expectations of lenders and borrowers can diverge and lead to bankruptcy (default) on the part of the borrowers.
Lingua originaleEnglish
pagine (da-a)1159-1169
Numero di pagine11
RivistaJOURNAL OF ECONOMIC DYNAMICS & CONTROL
Volume33
Stato di pubblicazionePubblicato - 2009

Keywords

  • Bankruptcy
  • Credit economy
  • Heterogeneity
  • Learning

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