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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

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

Assessing bankruptcy reform in a model with temptation and equilibrium default

Nakajima, Makoto - Federal Reserve Bank of Philadelphia - 2015

A life-cycle model with equilibrium default in which consumers with and without temptation coexist is constructed to evaluate the 2005 bankruptcy law reform and other counterfactual reforms. The calibrated model indicates that the 2005 bankruptcy reform achieves its goal of reducing the number...

Persistent link: https://www.econbiz.de/10011196367

Identity theft as a teachable moment

Cheney, Julia S.; Hunt, Robert M.; Mikhed, Vyacheslav; … - Federal Reserve Bank of Philadelphia - 2014

This paper examines how instances of identity theft that are sufficiently severe to induce consumers to place an extended fraud alert in their credit reports affect their risk scores, delinquencies, and other credit bureau variables on impact and thereafter. We show that for many consumers these...

Persistent link: https://www.econbiz.de/10010930294

The economics of debt collection: enforcement of consumer credit contracts

Fedaseyeu, Viktar; Hunt, Robert M. - Federal Reserve Bank of Philadelphia - 2014

In the U.S., third-party debt collection agencies employ more than 140,000 people and recover more than $50 billion … advantage in collecting debts owed to them. Then, why does the debt collection industry exist and why is it so large … unconcentrated industry of third-party debt collection agencies can implement an equilibrium with more intense collections activity …

Persistent link: https://www.econbiz.de/10010752602

A tale of two vintages: credit limit management before and after the CARD act and Great Recession

Santucci, Lawrence - Federal Reserve Bank of Philadelphia - 2015

This paper uses tradeline-level credit card data to examine initial credit limits and early credit limit increases before and after the Great Recession and implementation of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (the CARD Act). I compare two vintages of...

Persistent link: https://www.econbiz.de/10011170308

Consumer use of fraud alerts and credit freezes: an empirical analysis

Cheney, Julia S.; Hunt, Robert M.; Mikhed, Vyacheslav; … - Federal Reserve Bank of Philadelphia - 2014

Fraud alerts — initial fraud alerts, extended fraud alerts, and credit freezes — help protect consumers from the consequences of identity theft. At the same time, they may impose costs on lenders, credit bureaus, and, in some instances, consumers. We analyze a unique data set of anonymized...

Persistent link: https://www.econbiz.de/10011027168

Reverse mortgage loans: a quantitative analysis

Nakajima, Makoto; Telyukova, Irina A. - Federal Reserve Bank of Philadelphia - 2014

Supersedes Working Paper 13-27. Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. Despite growth in this market, only 2.1% of eligible homeowners had RMLs in 2011. In this paper, the authors analyze reverse mortgages in a calibrated life-cycle...

Persistent link: https://www.econbiz.de/10010930296

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