During the first decade of the 21st century, the United States witnessed a dramatic rise in household debt followed by a severe default crisis. In this study, we review the existing literature and provide new evidence supporting the credit supply view of the episode, which holds that an increase...

During the first decade of the 21st century, the United States witnessed a dramatic rise in household debt followed by a severe default crisis. In this study, we review the existing literature and provide new evidence supporting the credit supply view of the episode, which holds that an increase...

We show that household leverage as of 2006 is a powerful statistical predictor of the severity of the 2007 to 2009 recession across U.S. counties. Counties in the U.S. that experienced a large increase in household leverage from 2002 to 2006 showed a sharp relative decline in durable consumption...

We show that household leverage as of 2006 is a powerful statistical predictor of the severity of the 2007 to 2009 recession across U.S. counties. Counties in the U.S. that experienced a large increase in household leverage from 2002 to 2006 showed a sharp relative decline in durable consumption...

We study the business cycle consequences of credit supply expansion in the U.S. The 1980's credit boom resulted in stronger credit expansion in more deregulated states, and these states experience a more amplified business cycle. A new test shows that amplification is primarily driven by the...