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In this paper, I construct a model of an exchange economy in which bankruptcy arises in a manner similar to what we observe. This model is a more realistic representation of some markets in which intertemporal assets are traded. Using standard and natural assumptions, I show that every economy...
Persistent link: https://www.econbiz.de/10012889092
This paper studies the optimal determination of bankruptcy exemptions for risk averse borrowers who use unsecured contracts but have the possibility of defaulting. I show that, in a large class of economies, knowledge of four variables is sufficient to determine whether a bankruptcy exemption...
Persistent link: https://www.econbiz.de/10011975293
We document the cyclical properties of unsecured consumer credit (procyclical and volatile) and of consumer bankruptcies (countercyclical and very volatile). Using a growth model with household heterogeneity in earnings and assets with access to unsecured credit (because of bankruptcy costs) and...
Persistent link: https://www.econbiz.de/10012197797
Does finance facilitate efficient allocation of resources? Our aim in this paper is to find out whether increases in private and public indebtedness affect capital misallocation, which is measured as the dispersion in the return to capital across firms in different industries. For this, we use a...
Persistent link: https://www.econbiz.de/10012132686
individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …
Persistent link: https://www.econbiz.de/10013492266
Despite a large body of research, there is limited causal evidence available to understand the impact of providing credit access to women in households on overall household well-being. This paper aims to measure the effects of providing credit to women compared to men on household well-being...
Persistent link: https://www.econbiz.de/10014354156
This paper studies the optimal determination of bankruptcy exemptions for risk averse borrowers who use unsecured contracts but have the possibility of defaulting. I show that, in a large class of economies, knowledge of four variables is sufficient to determine whether a bankruptcy exemption...
Persistent link: https://www.econbiz.de/10013248848
The present paper studies optimal monetary policy when the representative agent assumption is abandoned and financial wealth heterogeneity across households is introduced. Incomplete markets make households incapable of perfectly insuring against interest rate and inflation risk, creating a...
Persistent link: https://www.econbiz.de/10012728849
The 1990's witnessed a historically unprecedented number of personal bankruptcy filings. In response, congressional debate over bankruptcy law has recently led to several proposals aimed at making it more difficult to exempt wealth in bankruptcy. In this paper, I evaluate uniform exemption...
Persistent link: https://www.econbiz.de/10013097130
Because of the recent surge in U.S. personal defaults, Congress is currently debating bankruptcy reform legislation requiring a means test for Chapter 7 filers. This paper explores the effects of such a reform in a model where, in contrast to previous work, bankruptcy options and production are...
Persistent link: https://www.econbiz.de/10013097246