The COVID Medical-Debt Bomb that Fizzled
Even before COVID-19, Americans already owed $140 billion for delinquent medical bills. When the pandemic hit the United States, that debt burden appeared likely to increase significantly, as hospitalizations spiked, unemployment soared, and millions lost their employer-sponsored health benefits.
Competition and Selection in Credit Markets
Constantine Yannelis and Anthony Lee Zhang
In more competitive markets, lenders have lower market shares, and thus lower incentives to monitor borrowers. Thus, when markets are competitive, all lenders face a riskier pool of borrowers, which can lead interest rates to be higher, and consumer welfare to be lower.
What Determines Consumer Financial Distress? Place- and Person-Based Factors
Benjamin J. Keys, Neale Mahoney, and Hanbin Yang
Financial distress evolves when people move to places with different levels of financial distress. For collections and default, there is only weak convergence following a move, suggesting these types of financial distress are not primarily caused by place-based factors (such as local economic conditions, loan supply, and state laws) but instead reflect person-based characteristics (such as financial literacy and risk preferences).
Financing the Gig Economy
The gig economy is uniquely sensitive to household borrowing constraints on the extensive margin: When finance is unavailable to low-income households, these gains evaporate.
Credit Supply and Housing Speculation
Atif Mian and Amir Sufi
The surge in private label mortgage securitization in 2003 fueled a large expansion in mortgage credit supply by lenders financed with non-core deposits.
How do Americans repay their debt? The balance-matching heuristic
John Gathergood, Neale Mahoney, Neil Stewart, and Jörg Weber
By studying credit card repayments using linked data on multiple cards from the United Kingdom, the authors showed that individuals did not allocate payments to the higher interest rate card, which would minimize the cost of borrowing, but instead made repayments according to a balance-matching heuristic under which the share of repayments on each card is matched to the share of balances on each card.