Social and Behavioral Sciences Commons^™

Liquidity, Default And Crashes: Endogenous Contracts In General Equilibrium, John Geanakoplos

Cowles Foundation Discussion Papers

The possibility of default limits available liquidity. If the potential default draws nearer, a liquidity crisis may ensue, causing a crash in asset prices, even if the probability of default barely changes, and even if no defaults subsequently materialize. Introducing default and limited collateral into general equilibrium theory (GE) allows for a theory of endogenous contracts, including endogenous margin requirements on loans. This in turn allows GE to explain liquidity and liquidity crises in equilibrium. A formal definition of liquidity is presented. When new information raises the probability and shortens the horizon over which a fixed income asset may default, …

Liquidity, Default And Crashes: Endogenous Contracts In General Equilibrium, John Geanakoplos

Cowles Foundation Discussion Papers

Introducing default and limited collateral into general equilibrium theory (GE) allows for a theory of endogenous contracts, including endogenous margin requirements on loans. This in turn allows GE to explain liquidity and liquidity crises in equilibrium. A formal definition of liquidity is presented. When new information raises the probability a fixed income asset may default, its drop in price may be much greater than its objective drop in value because the drop in value reduces the relative wealth of its natural buyers, who disproportiantely own the asset through leveraged purchases. When the information also shortens the horizon over which the …

Liquidity, Default And Crashes: Endogenous Contracts In General Equilibrium, John Geanakoplos

Cowles Foundation Discussion Papers

Introducing default and limited collateral into general equilibrium theory (GE) allows for a theory of endogenous contracts, including endogenous margin requirements on loans. This in turn allows GE to explain liquidity and liquidity crises in equilibrium. A formal definition of liquidity is presented. When new information raises the probability a fixed income asset may default, its drop in price may be much greater than its objective drop in value because the drop in value reduces the relative wealth of its natural buyers, who disproportiantely own the asset through leveraged purchases. When the information also shortens the horizon over which the …

Comparison Of Law Enforcement Contracts In Onondaga County, Syracuse University. Maxwell School. Community Benchmarks Program

Community Benchmarks Program

This study provides information on the contractual agreements of 14 of the16 police departments

in Onondaga County. The study was conducted by the Community Benchmarks Program (CBP)

at The Maxwell School of Syracuse University.

Information for this study was obtained from the bargaining unit contracts negotiated by

representatives of the police and sheriff’s departments with the governing bodies of their

respective municipalities or the county. The New York State and Local Police and Fire

Retirement System and the 1999 New York Municipal Reference Guide were also used as source material. This report looks at 14 of the 16 contracts in …