If mortgage borrowers default strategically, their future house price expectations should affect their present mortgage default decisions. Merging the Freddie Mac loan performance dataset with the Michigan Survey of Consumers data containing households' subjective expectations, this paper...

Present paper shows that credit regarding job creation is ineffective in the 2000s, while it was effective in 1980s and 1990s. This paper attempts to support the view of (Bouis et al., 2013), that recently growth is sluggish, in spite of the massive monetary stimulus. Further, it will support...

In this paper is shown that financial deepening is good for job creation up to a critical point, beyond which unemployment starts rising. The reason can be the heavy debt the private sector is bearing, so that business sector becomes unable to pay off debts, and thus companies go bankrupt...

We consider a mean-variance general equilibrium economy where the expected returns for controlling and non-controlling shareholders are different because the former are able to divert a fraction of the profits. We find that when investor protection is poor, asset return correlation affects...

Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South...

Some argue too-big-to-fail (TBTF) status increases the value of the largest banks. In contrast, we find that the value of the largest banks is negatively related to asset size in normal times, but not during the financial crisis when TBTF status was most valuable. Further, shareholders lose when...

Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South...

We investigate whether the value of large banks, defined as banks with assets in excess of the Dodd-Frank threshold for enhanced supervision, increases with the size of their assets using Tobin's q and market-to-book as our valuation measures. Many argue that large banks receive subsidies from...