Standard economic theory says that unsecured, high-interest, short-term debt — such as borrowing via credit cards and … income shock of unemployment. Instead, individuals smooth their credit card debt and overdrafts by adjusting consumption. We … first use detailed longitudinal information on debit and credit card transactions, account balances, and credit lines from a …

-constrained investors to take excessive risks. Ignored are unconstrained investors speculating on higher prices during credit booms. To … a bank/brokerage-credit-fueled stock-market bubble. The direct effect is a 25 cent increase in a stock's market …

A growing literature shows that credit indicators forecast aggregate real outcomes. While researchers have proposed … simple, frictionless, model explains empirical findings commonly attributed to credit cycles. Our key assumption is that … firms have heterogeneous exposures to underlying economy-wide shocks. This leads to endogenous dispersion in credit quality …

How does the large market for credit score improvement products affect consumers and market efficiency? For consumers …, we use a randomized encouragement design on a standard credit builder loan (CBL) and find null average effects on scores … credit activity. CBLs induce delinquency on pre-existing loan obligations, suggesting that even a seemingly modest additional …

This paper develops a network model of interbank lending, in which banks decide to extend credit to their potential … literature on financial networks, we focus on how anticipation of future defaults may result in ex ante “credit freezes,” whereby … banks refuse to extend credit to one another. We first characterize the terms of the interbank contracts and the patterns of …

justification for this pattern based on adverse selection that entrepreneurs face in credit markets. Individuals choose between …-subsidization in the credit market equilibrium results in excessive (insufficient) entry of low-skilled (high-skilled) agents into …

Many observers have argued that credit default swaps contributed significantly to the credit crisis. Of particular … concern to these observers are that credit default swaps trade in the largely unregulated over-the-counter market as bilateral … strength. Some observers have suggested that credit default swaps would not have made the crisis worse had they been traded on …

Empirical tests of reduced form models of default attribute a large fraction of observed credit spreads to compensation … index reacts adversely to a credit event. In this paper, we propose a tractable model for pricing corporate bonds subject to … to large credit events. Model calibrations suggest that while contagion risk premia may be sizable, jump-to-default risk …

the financial health of the contracting parties and uncertainty regarding the borrowers' credit quality. The relative …

The market for corporate credit is characterized by significant seasonal variation, both in interest rates and the …