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Heterogeneous expectations, collateral constraints and unconventional monetary policy

Author

Listed:
  • Aloisio Araujo

    (IMPA, FGV-RJ)

  • Liev Maribondo

    (IMPA)

  • Susan Schommer

    (UFRJ)

Abstract

We consider the effects of heterogeneous beliefs in a general equilibrium model with endogenous collateral constraints and unconventional monetary policy. The heterogeneous expectations modify the way in which agents are restricted in the collateral. We numerically show that the relative optimism of the borrower makes him more leveraged and that this increases the welfare gains of unconventional monetary policy.

Suggested Citation

  • Aloisio Araujo & Liev Maribondo & Susan Schommer, 2018. "Heterogeneous expectations, collateral constraints and unconventional monetary policy," Economics Bulletin, AccessEcon, vol. 38(4), pages 2064-2072.
    • Handle: RePEc:ebl:ecbull:eb-18-00614
    as

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    References listed on IDEAS

    as
    1. Aloísio Araújo & Susan Schommer & Michael Woodford, 2015. "Conventional and Unconventional Monetary Policy with Endogenous Collateral Constraints," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(1), pages 1-43, January.
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    More about this item

    Keywords

    general equilibrium; heterogeneous beliefs; collateral; unconventional monetary policy; Pareto improvement;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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