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 …

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 …

-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 …

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 …

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

This paper is a theoretical study into how credit constraints interact with aggregate economic activity over the … not only factors of production, but they also serve as collateral for loans. Borrowers' credit limits are affected by the … prices of the collateralized assets. And at the same time, these prices are affected by the size of the credit limits. The …

"optimal" bubble by taxing credit when the "equilibrium" bubble is too high, and subsidizing credit when the "equilibrium …We study a dynamic economy where credit is limited by insufficient collateral and, as a result, investment and output … are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles …

the importance of equilibrium credit quality inference from borrowers' endogenous sign-up decisions. When data sharing …

This paper develops a model of a self-fulfilling credit market freeze and uses it to study alternative governmental … ability of other operating firms to obtain financing. In such an economy, an inefficient credit market freeze may arise in … getting an economy out of an inefficient credit market freeze. In particular, we study the effectiveness of interest rate cuts …