A Quantitative Theory of Information and Unsecured Credit

Kartik Athreya, Xuan Tam () and Eric Young

American Economic Journal: Macroeconomics, 2012, vol. 4, issue 3, 153-83

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)

JEL-codes: D14 D82 G21 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/mac.4.3.153
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Citations: View citations in EconPapers (68)

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Related works:
Working Paper: A quantitative theory of information and unsecured credit (2011)
Working Paper: A Quantitative Theory of Information and Unsecured Credit (2008)
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