Why is there debt?

Jeffrey Lacker

Economic Review, 1991, vol. 77, issue Jul, 3-19

Abstract: Most loan repayment agreements are largely noncontingent, and yet standard economic theory predicts that they should be highly contingent. An explanation is offered that relies on imperfect information and collateral. The theory suggests that perhaps all debt contracts are implicitly collateralized.

Keywords: Debt (search for similar items in EconPapers)
Date: 1991
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