A key (and then un-noted) element of this market was that it was in equilibrium.
At the time of this writing, the CMBS market is still seeking its new equilibrium.
Not all observers agreed that the going terms and rates were right, but buyers and sellers cleared them, and the market was at equilibrium.
It can produce multiple equilibriums that lead to excess volatility in prices and output because of changing beliefs of private agents.
The authors employ a New Neoclassical Synthesis model, specified to produce a unique equilibrium, in which policymakers follow a standard Henderson-McKibbin-Taylor rule to set the policy rate.