{"id":2733,"date":"2021-03-26T14:59:23","date_gmt":"2021-03-26T14:59:23","guid":{"rendered":"http:\/\/blogs.kent.ac.uk\/economics\/?p=2733"},"modified":"2021-03-26T15:47:28","modified_gmt":"2021-03-26T15:47:28","slug":"leon-ledesmas-latest-paper-is-accepted-in-a-special-issue-of-mathematical-social-sciences","status":"publish","type":"post","link":"https:\/\/blogs.kent.ac.uk\/economics\/2021\/03\/26\/leon-ledesmas-latest-paper-is-accepted-in-a-special-issue-of-mathematical-social-sciences\/","title":{"rendered":"Leon-Ledesma&#8217;s latest paper is accepted in a special issue of Mathematical Social Sciences."},"content":{"rendered":"<p><a href=\"https:\/\/www.kent.ac.uk\/economics\/people\/451\/le%C3%B3n-ledesma-miguel\">Professor Miguel Leon-Ledesma<\/a> has had a paper accepted in Mathematical Social Sciences.<\/p>\n<p>Entitled &#8216;Production, Bankruptcy, and Financial Policies under Collateral Constraints&#8217; it is co authored with Jamie Orrillo from the Catholic University of Brasilia.<\/p>\n<p>&#8220;This is a special issue of MSS in memory of the late <a href=\"https:\/\/www.amse-aixmarseille.fr\/en\/news\/so-long-carine\">Carine Nourry<\/a>, who passed away in June 2019.&#8221; Leon-Ledesma explained. &#8220;Carine was a close friend and co-author. She was also a visitor at the School of Economics and <a href=\"https:\/\/research.kent.ac.uk\/maghic\/\">MaGHiC<\/a>. The special issue has been edited by Raouf Boucekkine, Thomas Seegmuller, and Alain Venditti and contains contributions from authors such as Jean-Michel Grandmont, Jess Benhabib, David de la Croix, Mathias Doepke, and Carine herself. This is a great tribute to a phenomenal person.&#8221;<\/p>\n<p>\u2018Production, Bankruptcy, and Financial Policies under Collateral Constraints\u2019 builds a model where firms face borrowing constraints as assets require collateral backing. The impact of financial variables on the real economy has been the subject of an large literature in macroeconomics.<\/p>\n<p>&#8220;Different from most papers in the literature, firms are allowed to default. The model generates counter-cyclical default, consistent with the data. Importantly, we show that, under standard conditions, a macroeconomic equilibrium exists. This equilibrium is &#8220;second best&#8221; efficient. Also, we show that firm&#8217;s borrowing decisions can have real effects in the economy, violating some key theorems in corporate finance. In this respect, the paper constitutes an important step to incorporating producers&#8217; default and bankruptcy in general equilibrium macro models.&#8221;<\/p>\n<p>This is even more relevant in the face of the unprecedented Covid-19 crisis that has put business activities in certain sectors under enormous stress.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Professor Miguel Leon-Ledesma has had a paper accepted in Mathematical Social Sciences. Entitled &#8216;Production, Bankruptcy, and Financial Policies under Collateral Constraints&#8217; it is co authored &hellip; <a href=\"https:\/\/blogs.kent.ac.uk\/economics\/2021\/03\/26\/leon-ledesmas-latest-paper-is-accepted-in-a-special-issue-of-mathematical-social-sciences\/\">Read&nbsp;more<\/a><\/p>\n","protected":false},"author":66395,"featured_media":2736,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[94129,70,1],"tags":[241605,241610,241608,241606,241607,241609],"_links":{"self":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2733"}],"collection":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/users\/66395"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/comments?post=2733"}],"version-history":[{"count":7,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2733\/revisions"}],"predecessor-version":[{"id":2743,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/2733\/revisions\/2743"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/media\/2736"}],"wp:attachment":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/media?parent=2733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/categories?post=2733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/tags?post=2733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}