The Leverage Cycle
55 Pages Posted: 5 Aug 2009
Date Written: July 31, 2009
Equilibrium determines leverage, not just interest rates. Variations in leverage cause fluctuations in asset prices. This leverage cycle can be damaging to the economy, and should be regulated.
Keywords: Leverage, Collateral, Cycle, Crisis, Regulation
JEL Classification: E3, E32, G01, G12
Suggested Citation: Suggested Citation