Unsecured credit markets are not insurance markets

Kartik Athreya (), Xuan S. Tam and Eric R. Young ()

Journal of Monetary Economics, 2009, vol. 56, issue 1, pages 83-103

Abstract: We study the extent to which unsecured credit markets have altered the transmission of increased income risk to consumption variability over the past several decades. We find that unsecured credit markets pass through increased income risk to consumption, irrespective of bankruptcy policy and the information possessed by lenders. If risk sharing has indeed improved over this period, the reasons do not therefore lie in the unsecured credit market.

Keywords: Risk; sharing; Asymmetric; information; Bankruptcy; Default (search for similar items in EconPapers)
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:1:p:83-103

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