A comparison of models and results from selected papers on personal bankruptcy establishes how particular modeling assumptions matter for the implications of bankruptcy. For example, it can be argued that only under income processes that allow for large shocks to net worth can bankruptcy play a role in improving welfare. However, despite the progress evident from the work so far, questions remain, the resolution of which is critical to forming a definitive view of the role for personal default.
Our Research Focus: Consumer Finance
Amanda L. Kramer
To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).