Title

The Leverage Cycle

Authors

John Geanakoplos

Document Type

Discussion Paper

Publication Date

7-1-2009

CFDP Number

1715R

CFDP Revision Date

2010-01-01

CFDP Pages

57

Abstract

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.

Recommended Citation

Geanakoplos, John, "The Leverage Cycle" (2009). Cowles Foundation Discussion Papers. 2034.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2034