| 000 -LEADER |
|---|
| fixed length control field |
01434nam a22001577a 4500 |
| 008 - FIXED-LENGTH DATA ELEMENTS--GENERAL INFORMATION |
|---|
| fixed length control field |
210226b ||||| |||| 00| 0 eng d |
| 100 ## - MAIN ENTRY--PERSONAL NAME |
|---|
| Personal name |
Cao, Dan and Lagunoff, Roger |
| 245 ## - TITLE STATEMENT |
|---|
| Title |
Optimal collateralized contracts |
| 260 ## - PUBLICATION, DISTRIBUTION, ETC. (IMPRINT) |
|---|
| Place of publication, distribution, etc |
American Economic Journal: Microeconomics |
| 300 ## - PHYSICAL DESCRIPTION |
|---|
| Extent |
12(4), Nov, 2020: p.45-74 |
| 520 ## - SUMMARY, ETC. |
|---|
| Summary, etc |
We examine the role of collateral in a dynamic model of optimal credit contracts in which a borrower values both housing and nonhousing consumption. The borrower's private information about his income is the only friction. An optimal contract is collateralized when in some state, some portion of the borrower's net worth is forfeited to the lender. We show that optimal contracts are always collateralized. The total value of forfeited assets is decreasing in income, highlighting the role of collateral as a deterrent to manipulation. Some assets—those that generate consumable services—will necessarily be collateralized, while others may not be. Endogenous default arises when the borrower's initial wealth is low, as with subprime borrowers, and/or his future earnings are highly variable. – Reproduced |
| 650 ## - SUBJECT ADDED ENTRY--TOPICAL TERM |
|---|
| Topical term or geographic name as entry element |
Economics of Contract, Banks, Depository institutions, Micro Finance Institutions; Mortgages, Household Finance, Household Saving, Borrowing, Debt, Wealth |
| 9 (RLIN) |
25706 |
| 773 ## - HOST ITEM ENTRY |
|---|
| Main entry heading |
American Economic Journal: Microeconomics |
| 906 ## - LOCAL DATA ELEMENT F, LDF (RLIN) |
|---|
| Subject DIP |
BANKING AND FINANCE |
| 942 ## - ADDED ENTRY ELEMENTS (KOHA) |
|---|
| Item type |
Articles |
