Economic Review


+ Share

Jul/Aug, 1991

Why Is There Debt?

Jeffrey M. Lacker

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.

Our Research Focus: Payments & Policy

Topics: Payments
Contact Us


Amanda L. Kramer
(804) 697-8606