Shale shocked: Cash windfalls and household debt repayment

Extinction debt repayment via timely habitat restoration

Habitat destruction threatens the viability of many populations, but its full consequences can take considerable time to unfold. Much of the discourse surrounding extinction debts—the number of species that persist transiently following habitat loss, despite being headed for extinction—frames ultimate population crashes as the means of settling the debt. However, slow population decline also op...

Household debt and social interactions

Debt-induced crises, including the subprime, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey representative of the Dutch population, that circumvents the issue of defining the social circle, we consider collateralized, consum...

Income Inequality and Household Debt

Household Debt, Unemployment, and Slow Recoveries∗

This paper analyzes the effect of endogenous unemployment risk on the dynamics of recovery from a liquidity trap. In a liquidity trap, an adverse demand shock raises unemployment and produces a period of slow hiring. Slow hiring further reduces demand, both for standard precautionary reasons and because credit conditions endogenously worsen, reducing households’ ability to borrow and consume. T...

Trust, Consumer Debt, and Household Finance∗

Using a large sample of U.S. individuals, we show that trust is an important determinant of an array of household financial decisions and outcomes including debt management. Individuals with a higher level of trust are less likely to be in debt, miss payments, file bankruptcy, or go through foreclosure. Their households have lower financial leverage, higher retirement savings and assets, and gr...