The worst employment slumps tend to follow the largest expansions of household debt. In this paper, we theoretically investigate an amplification mechanism by which debt on household balance sheets distorts labor market search behavior, leading to deeper employment slumps. Using a competitive...

How does securitization affect the risk of the loans that are originated for securitization? While the standard view is that the originate-to-distribute (OTD) model weakens the originator's screening incentives and leads to higher risk, theories on reputation suggest that an originator's concern...