Using a unique dataset of credit card mailings, we show that during the recent credit boom, consumers with mediocre credit scores received more credit card solicitations than those with high credit scores. However, this relationship reversed after the financial crisis. We also nd that consumers...

Using a novel data set, we study the soft information in subprime mortgages that is not verifiable by a third party, and its relationship with mortgage default. We find that lender effort to collect soft information is intertwined with borrower self-selection into subprime mortgages. We employ...

The 30-year fixed-rate fully amortizing mortgage (or "traditional fixed-rate mortgage") was a substantial innovation when first developed during the Great Depression. However, it has three major flaws. First, because homeowner equity accumulates slowly during the first decade, homeowners are...

The enforcement of compliance with tax regulation is a complex task. This is particularly the case when the administrative capacity of the tax authority is low, as it often happens in developing and transition countries. This paper draws on some international experiences in fighting tax evasion...

The enforcement of compliance with tax regulation is a complex task. This is particularly the case when the administrative capacity of the tax authority is low, as it often happens in developing and transition countries. This paper draws on some international experiences in fighting tax evasion...

In many countries, lenders are restricted in their access to information about borrowers' past defaults. The authors study this provision in a model of repeated borrowing and lending with moral hazard and adverse selection. They analyze its effects on borrowers' incentives and access to credit,...

This study analyzes whether bankruptcy asset exemptions and state foreclosure laws affect borrowers' decisions to default on their mortgages and the lenders' incentives to settle the default outside the foreclosure. Using a rigorously specified empirical model and accounting for endogenous loan...

In this paper, we show that a simple, linear capital tax — the kind used in the Ramsey analysis — can be optimal in a Mirrlees economy with private information. We extend the Mirrlees approach to optimal taxation by studying taxes side-by-side with another institution, rather than in...

How do job losers use default -- a phenomenon 6x more prevalent than bankruptcy -- as a type of “informal" unemployment insurance, and more importantly, what are the social costs and benefits of this behavior? To this end, I establish several new facts: (i) job loss is the main reason for...

Section 1129(b)(1) of the Bankruptcy Code codifies a principle known as the 'absolute priority rule.' The absolute priority rule requires that creditors be provided for in full before holders of equity can receive or retain any property under a plan of reorganization. The absolute priority rule...