is a problem when debt exposed to bankruptcy is part of the financial structure. Design/methodology/approach – The paper … that assumption were valid, however, the result of Mayers and Smith establishes that raising exposed debt is a negative net … – The existence of exposed debt does not explain the demand or commercial insurance. Originality/value – The paper …

period 1940–2014, we document the following evidence that corporate debt plays a key role in explaining boom-bust cycles …, financial crises, and slow macroeconomic recoveries: (i) corporate debt accounts for two thirds of the aggregate credit … expansion before crises and three quarters of total nonperforming loans during the bust; (ii) expansions in corporate debt …