Standard economic theory says that unsecured, high-interest, short-term debt -- such as borrowing via credit cards and … transitory 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 …

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

There is little evidence on how the large market for credit score improvement products affects consumers or credit … market efficiency. A randomized encouragement design on a standard credit builder loan (CBL) identifies null average effects … on whether consumers have a credit score and the score itself, with important heterogeneity: those with loans outstanding …

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 …

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 …

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 …

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 …

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 …

We develop a tractable dynamic model of credit markets in which lending standards and the quality of potential … can amplify and prolong temporary downturns, affecting lending volume, credit spreads, and default rates. We characterize … constraints naturally incentivize tight lending standards, further amplifying shocks to credit markets …

Using novel data on 1,240 credit agreements, we investigate sources of contractual complexity in the leveraged loan …