Athreya, Kartik B.; Tam, Xuan S.; Young, Eric R. - In: Economic Quarterly (2012) 4Q, pp. 255-307
In this article, we evaluate in detail the role of debt forgiveness in altering the transmission of labor income risk in the absence of catastrophic out-of-pocket "expense shocks" used in the literature on consumer default. The experiments we present can be thought of as: "If we insure the...