Sustainable debt

We show that debt is sustainable at a competitive equilibrium based solely on the reputation for repayment; is, even without collateral or legal sanctions available to creditors. In an incomplete asset market, when rate of interest falls recurrently below growth economy, self?insurance more costly than borrowing, and repayments loans are enforced by implicit threat loss risk?sharing advantages contracts. Private credibly circulates as form inside money, it not valued speculative bubble. Competitive equilibria with self?enforcing exist under suitable hypothesis gains from trade.