We study how credit scoring impacts the ability of individuals to consumption smooth. Our environment has ex-ante heterogeneity of household types. Credit scoring is interpreted as an intermediary's posterior of a household's type conditional on its bankruptcy and borrowing decisions. The...

Why does the level of economic activity vary so much across space? One reason given is "agglomeration economies," meaning that a firm's or household's production costs (of market and home goods, respectively) are lower when production is carried out in close proximity to other firms and...