Investor borrowing heterogeneity in a Kiyotaki-Moore style macro model

Maria Teresa Punzi, Katrin Rabitsch-Schilcher

Publication: Scientific journalJournal articlepeer-review

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We introduce heterogeneity in investors’ ability to borrow from collateral in a Kiyotaki–Moore style macro model, calibrated to the quintiles of the leverage-ratio distribution of US non-financial firms. Financial amplification intensifies, because of stronger asset price reactions of highly levered investors.
Original languageEnglish
Pages (from-to)75 - 79
JournalEconomics Letters
Publication statusPublished - 2015

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