Credit Supply to Bankrupt Households
نویسندگان
چکیده
The rate of households filing for personal bankruptcy soared in the past two decades, spurring extensive investigations on its causes and policy implications. Recent research suggests that the driving factor may be the sharp decrease in the cost of providing credit, especially unsecured credit cards, to the borrowers that would be not served by traditional lenders (e.g., Livshits, MacGee, and Tertile (2007), White (2007)). In particular, technological progress in information gathering, screening, and credit pricing allows profit-maximizing lenders to extend credit cards to borrowers with spotty credit history, including those who have filed for personal bankruptcy (e.g., Dick and Lehnert (2007)).
منابع مشابه
Credit Constraints under Interaction of Supply Rationing and Demand Depression: Evidence from Rural Households in China
This paper analyzes the credit demand depression phenomenon resulting from long-term institutional supply rationing. Under the interaction between imperfect formal credit system and rural households’ risk aversion behavior, rural households will be discouraged to depress their credit demand or replace it with informal credit, which we call demand-side credit constraints. It find that about 33.7...
متن کاملContributions of Debt and Bankruptcy to Life Course Mobility∗
This paper considers the significance of credit markets and bankruptcy for life course mobility. Comparing parallel data from the 2007 Survey of Consumer Finances (SCF) and the 2007 Consumer Bankruptcy Project (CBP), we analyze use of the bankruptcy process as a function of the distribution of unplanned events, the ability of households to use credit markets to limit the adverse effects of such...
متن کاملHave the GSE affordable housing goals increased the supply of mortgage credit?
In the 1980s, housing market analysts and policymakers were concerned that Freddie Mac and Fannie Mae were not adequately facilitating the financing of affordable housing for lowand moderate-income families. To address these concerns, the Department of Housing and Urban Development established quantitative Affordable Housing Goals requiring the Government Sponsored Enterprises (GSEs) to increas...
متن کاملNominal GDP Targeting With Heterogeneous Labor Supply
We study nominal GDP targeting as optimal monetary policy in a model with a credit market friction following Azariadis, Bullard, Singh and Suda (2016), henceforth ABSS. As in ABSS, the macroeconomy we study has considerable income inequality which gives rise to a large private sector credit market. Households participating in this market use non-state contingent nominal contracts (NSCNC). We ex...
متن کاملOptimal replenishment and credit policy in supply chain inventory model under two levels of trade credit with time- and credit-sensitive demand involving default risk
Traditional supply chain inventory modes with trade credit usually only assumed that the up-stream suppliers offered the down-stream retailers a fixed credit period. However, in practice the retailers will also provide a credit period to customers to promote the market competition. In this paper, we formulate an optimal supply chain inventory model under two levels of trade credit policy with d...
متن کامل