For many households, paying lower borrowing costs is the surest, fastest way to increase net worth. Using administrative, credit bureau and survey data on U.S. credit cards, we find pervasive and systematic cross-individual variation in borrowing costs. Credit risk and product differentiation explain about one-third of that variation. The remaining riskadjusted dispersion can materially affect ...

In the context of a simple model of public good provision, we study the requirement on an allocation rule that it be immune to manipulation by augmenting one’s endowment through borrowing from the outside world. We call it open-economy borrowing-proofness (Thomson, 2009). We ask whether the Lindahl rule satisfies the property. The answer is yes on both the domain of quasi-linear economies and o...

In the past, foreign borrowing by developing countries was comprised almost entirely of government borrowing. Recently, private firms and individuals in developing countries borrow substantially from foreign lenders. It is not clear whether the observed increase in private sector borrowing leads to overborrowing and frequent defaults by governments in developing countries. In this paper, we dev...

INTRODUCTION AND AIMS Thailand's longstanding HIV epidemic among injection drug users (IDU) has been attributed, in part, to the Thai government's unwillingness to implement evidence-based HIV prevention interventions. This study was undertaken to examine risk factors for syringe borrowing among a community-recruited sample of Thai IDU. DESIGN AND METHODS We examined the prevalence of syringe...

This paper explores the welfare consequences of unemployment insurance when private insurance markets are subject to enforcement frictions that limit debt accumulation, endogenously determining individual borrowing limits as a function of the length of unemployment. Reducing the replacement rate in the model initially increases borrowing, as the value of default declines significantly. As the r...

the purpose of this study is to assess the transaction cost of borrowing from non-governmental investment development funds which are established in less than a decade. transaction costs are considered as significant and limiting factors for micro-borrowers in using formal loans. the required data are provided by the investment developing support’s parent company using the stratified random sam...

We study an equilibrium in which agents face surprise liquidity shocks and invest in liquid and illiquid riskless assets. The random holding horizon from liquidity shocks makes the return of the illiquid security risky. The equilibrium premium for such risk depends on the constraint that agents face when borrowing against future income; it is insignificant without borrowing constraint, but can ...

We study how a household borrowing constraint the the form of a down payment requirement affects house price dynamics in an OLG model with standard preferences. We find that in certain situations the borrowing constraint shapes house price dynamics substantially. The importance of the constraint depends very much on whether house price changes are driven by interest rate or aggregate income sho...

Financing Decisions of Firms and Central Bank Policy* This Paper aims to explain the sharp rise in unhedged foreign borrowing by South East Asian corporations in the few years prior to the crisis despite remarkably little change in fundamentals. The crucial element of our story is the complementarity between decisions of firms and of the central bank, which gives rise to multiple equilibria: wh...