Limited personal liability for debts has long been justified as a tool to promote entrepreneurial risk taking by providing insurance to the borrower in the event of low returns. Nonetheless, such limits erode repayment incentives, and so may increase unsecured borrowing costs. Our paper is the...

Tertiary education in the U.S. requires large investments that are risky, lumpy, and well-timed. Tertiary education is also heavily subsidized. By making the risk of human capital investment more acceptable, especially to low wealth households, subsidies may increase investment in human capital,...

Limited personal liability for debts has long been justified as a tool to promote entrepreneurial risk taking by providing insurance to the borrower in the event of low returns. Nonetheless, such limits erode repayment incentives, and so may increase unsecured borrowing costs. Our paper is the...

by shifting borrowing away from younger and poorer households, to older, richer ones. In sum, strict limits to liability impede credit markets, and do so in a way that is quite regressive.

Turkey is the only founding member of the OECD that has not converged to the US in terms of per-capita GDP since 1950: its real GDP per capita is stuck at 20% of that of the US. At a proximate level, we show that Turkey's relative stagnation over the past 50 years is due to: (1) the relative...

The US personal bankruptcy system allows debtors to discharge uncollateralized debts if they give up assets in excess of a threshold known as an "exemption". However, since exemptions erode repayment incentives, they may increase borrowing costs. Our paper evaluates the tradeoff between credit...