A quantitative theory of information and unsecured credit

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

26 Scopus Citations
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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)153-183
Journal / PublicationAmerican Economic Journal: Macroeconomics
Volume4
Issue number3
Publication statusPublished - Jul 2012
Externally publishedYes

Abstract

Important changes have occurred in unsecured credit markets over the past three decades. Most prominently, there have been large increases in aggregate consumer debt, the personal bankruptcy rate, the size of bankruptcies, the dispersion of interest rates paid by borrowers, and the relative discount received by those with good credit ratings. We find that improvements in information available to lenders on household-level costs of bankruptcy can account for a significant fraction of what has been observed. The ex ante welfare gains from better information are positive but small. (JEL D14, D82, G21).

Citation Format(s)

A quantitative theory of information and unsecured credit. / Athreya, Kartik; Tam, Xuan S.; Young, Eric R.

In: American Economic Journal: Macroeconomics, Vol. 4, No. 3, 07.2012, p. 153-183.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review