expected credit losses, are responsible for these features. Building on the idea that corporate debt, while safe in ordinary …

71 percent of GDP in 1982. A borrowing surge followed: Household debt increased from 43 to 62 percent of GDP in the 1982 …

debt and compel it to accumulate equity in its durable goods stock. The household's discount rate exceeds the market rate … constraints generate a positive comovement between the household's debt, the stock of durable goods and labor supply following … purchases and the subsequent debt repayment. Increasing the speed of debt repayment amplifies these movements. …