About this document
Equilibrium with Default and Collateral by jim porras cajahuaman is a document available to read on EtoBox.
The paper presents a two-period general equilibrium model that incorporates default and endogenizes collateral in incomplete asset markets. It requires sellers to provide collateral and purchase state-by-state default insurance, with the insurance cost acting as a spread that influences asset prices. The model ensures the existence of equilibrium under these conditions and discusses the implications of collateralized derivatives in market transactions.
- Author
- jim porras cajahuaman
- Language
- EN