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Accounting for the Rise in Consumer Bankruptcies
Igor Livshits
James MacGee
Michèle Tertilt
出版
National Bureau of Economic Research
, 2007
主題
Business & Economics / Economics / General
ISBN
0771427522
9780771427527
URL
http://books.google.com.hk/books?id=PKID6ciQzesC&hl=&source=gbs_api
註釋
Personal bankruptcies in the United States have increased dramatically, rising from 1.4 per thousand working age population in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive financial intermediaries who can observe households' earnings, age and current asset holdings to evaluate several commonly offered explanations. We find that increased uncertainty (income shocks, expense uncertainty) cannot quantitatively account for the rise in bankruptcies. Instead, the rise in filings appears to mainly reflect changes in the credit market environment. We find that credit market innovations which cause a decrease in the transactions cost of lending and a decline in the cost of bankruptcy can largely accounting for the rise in consumer bankruptcy. We also argue that the abolition of usury laws and other legal changes are unimportant.