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Credit, bankruptcy, and aggregate fluctuations

Nakajima, Makoto; Rios-Rull, Jose-Victor - Federal Reserve Bank of Philadelphia - 2014

We ask two questions related to how access to credit affects the nature of business cycles. First, does the standard theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and countercyclicality of bankruptcy filings found in U.S. data?...

Persistent link: https://www.econbiz.de/10010941009

Collateral damage: Sizing and assessing the subprime CDO crisis

Cordell, Larry; Huang, Yilin; Williams, Meredith - Federal Reserve Bank of Philadelphia - 2011

This paper conducts an in-depth analysis of structured finance asset-backed securities collateralized debt obligations …

Persistent link: https://www.econbiz.de/10009216225

The macroeconomics of firms' savings

Armenter, Roc; Hnatkovska, Viktoria - Federal Reserve Bank of Philadelphia - 2011

firm-level data. They develop a structural model with investment, debt, and equity. Debt is fiscally advantageous but …

Persistent link: https://www.econbiz.de/10009395277

Debt dilution and seniority in a model of defaultable sovereign debt

Chatterjee, Satyajit; Eyigungor, Burcu - Federal Reserve Bank of Philadelphia - 2012

An important source of inefficiency in long-term debt contracts is the debt dilution problem, wherein a borrower … ignores the adverse impact of new borrowing on the market value of outstanding debt and, therefore, borrows too much and … defaults too frequently. A commonly proposed remedy to the debt dilution problem is seniority of debt, wherein creditors who …

Persistent link: https://www.econbiz.de/10010552110

A tale of two commitments: equilibrium default and temptation

Nakajima, Makoto - Federal Reserve Bank of Philadelphia - 2013

model provides quantitatively similar answers to positive questions such as the causes of the observed rise in debt and …

Persistent link: https://www.econbiz.de/10010732485

Rising indebtedness and hyperbolic discounting: a welfare analysis

Nakajima, Makoto - Federal Reserve Bank of Philadelphia - 2009

Is the observed rapid increase in consumer debt over the last three decades good news for consumers? This paper … increase in aggregate debt between 1980 and 2000 in the model with standard exponential discounting consumers, there is a …

Persistent link: https://www.econbiz.de/10008627171

Creditor control of free cash flow

Huang, Rocco - Federal Reserve Bank of Philadelphia - 2009

With free cash flows, borrowers can accumulate cash or voluntarily pay down debts. However, sometimes creditors impose a mandatory repayment covenant called "excess cash flow sweep" in loan contracts to force borrowers to repay debts ahead of schedule. About 17 percent of borrowers in the...

Persistent link: https://www.econbiz.de/10008627174

Measuring U.S. credit card borrowing: an analysis of the G.19's estimate of consumer revolving credit

Furletti, Mark; Ody, Christopher - Federal Reserve Bank of Philadelphia - 2006

This paper describes the Federal Reserve System’s monthly estimate of revolving consumer credit as published in the G.19 statistical release. It analyzes the source data, sampling methods, and calculations on which this estimate currently relies. In addition, it proposes a framework for...

Persistent link: https://www.econbiz.de/10005728931

Where is the missing credit card debt? Clues and implications

Zinman, Jonathan - Federal Reserve Bank of Philadelphia - 2007

definitions between household and industry measures reduces debt underreporting to a factor of two. Underreporting is less severe …

Persistent link: https://www.econbiz.de/10005728950

Debt covenants and renegotiation

Berlin, Mitchell; Mester, Loretta J. - Federal Reserve Bank of Philadelphia - 1990

Persistent link: https://www.econbiz.de/10005717315