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Aloisio Araujo, Liev Maribondo and Susan Schommer
''Heterogeneous expectations, collateral constraints and unconventional monetary policy''
( 2018, Vol. 38 No.4 )
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.
Keywords: general equilibrium, heterogeneous beliefs, collateral, unconventional monetary policy, Pareto improvement
JEL: D5 - General Equilibrium and Disequilibrium: General
E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
Manuscript Received : Jul 28 2018 Manuscript Accepted : Nov 06 2018

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