Recent Developments in Consumer Credit and Default Literature

Livshits, Igor

doi:10.1111/joes.12119

Cited by 45 publications

(11 citation statements)

References 144 publications

(315 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Our notion of equilibrium, in which investors internalize that their balance-sheet decisions can affect the payoffs of creditors in equilibrium, is standard in models that allow for default (e.g., Dubey, Geanakoplos and Shubik, 2005;Aguiar and Amador, 2013;Livshits, 2015). Until we introduce our applications in Section 4, we proceed as if the environment considered here is well-behaved.…”

Section: Environmentmentioning

confidence: 99%

Corrective Regulation with Imperfect Instruments

Dávila¹,

Walther²

2021

View full text Add to dashboard Cite

This paper studies the optimal design of second-best corrective regulation, when some agents or activities cannot be perfectly regulated. We show that policy elasticities and Pigouvian wedges are sufficient statistics to characterize the marginal welfare impact of regulatory policies in a large class of environments. We show that the optimal second-best policy is determined by a subset of policy elasticities: leakage elasticities, and characterize the marginal value of relaxing regulatory constraints. We apply our results to scenarios with unregulated agents/activities and with uniform regulation across agents/activities. We illustrate our results in applications to shadow banking, scale-invariant regulation, asset substitution, and fire sales.

show abstract

Section: Environmentmentioning

confidence: 99%

Corrective Regulation with Imperfect Instruments

Dávila¹,

Walther²

2021

View full text Add to dashboard Cite

show abstract

“…This paper contributes to the literature on creditor remedies, reviewed in Hynes and Posner (2002), Athreya (2005), and Livshits (2014). Extensive research has studied contract enforcement mechanisms in consumer credit markets, such as personal bankruptcy and garnishment.…”

Section: Introductionmentioning

confidence: 96%

The Economics of Debt Collection: Enforcement of Consumer Credit Contracts

Fedaseyeu¹,

Hunt²

2018

Working Paper (Federal Reserve Bank of Philadelphia)

View full text Add to dashboard Cite

Creditors often outsource the task of obtaining repayment from defaulting borrowers to third-party debt collectors. We argue that by hiring third-party debt collectors, creditors can avoid competing in terms of their debt collection practices. This explanation fits several empirical facts about third-party debt collection and is consistent with the evidence that third-party debt collectors use harsher debt collection practices than the original creditors. Our model shows that the impact of third-party debt collectors on consumer welfare depends on the riskiness of the pool of borrowers and provides insights into which policy interventions may improve the functioning of the debt collection market.

show abstract

“…1 1 Recent contributions to the quantitative literature on unsecured consumer debt have been discussed by Livshits (2015). …”

mentioning

confidence: 99%

Are household consumption decisions affected by past due unsecured debt? Theory and evidence

Bechlioulis

Brissimis

2020

Int. J Fin Econ

View full text Add to dashboard Cite

We study delinquent and non‐performing loans in consumer credit markets and their implications for consumer behaviour. By introducing endogenously non‐payment of debt in the inter‐temporal optimization problem of a representative borrowing household, we derive analytically an augmented consumption Euler equation featuring a risk factor in terms of expected non‐performing debt and delinquent debt. We find that the presence of the risk factor differentiates the estimated values of the preference parameters and enhances the model's structure in comparison to the benchmark representative agent model with full debt repayment, which seems to be an incomplete description of consumer behaviour.

show abstract

Recent Developments in Consumer Credit and Default Literature

Cited by 45 publications

References 144 publications

Corrective Regulation with Imperfect Instruments

Corrective Regulation with Imperfect Instruments

The Economics of Debt Collection: Enforcement of Consumer Credit Contracts

Are household consumption decisions affected by past due unsecured debt? Theory and evidence

Contact Info

Product

Resources

About