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All HBS Web
(87)
- News (11)
- Research (62)
- Multimedia (1)
- Faculty Publications (21)
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- October 22, 2012
- Article
Interest Rate Pass-Through: Mortgage Rates, Household Consumption, and Voluntary Deleveraging
By: Marco Di Maggio, Amir Kermani, Benjamin Keys, Tomasz Piskorski, Rodney Ramcharan, Amit Seru and Vincent Yao
Exploiting variation in the timing of resets of adjustable-rate mortgages (ARMs), we find that a sizable decline in mortgage payments (up to 50%) induces a significant increase in car purchases (up to 35%). This effect is attenuated by voluntary deleveraging. Borrowers...
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Keywords:
Monetary Policy;
Household Finance;
Refinancing;
Contract Rigidities;
Debt Rigidity;
MPC;
Deleveraging;
Personal Finance;
Household;
Policy;
Borrowing and Debt;
Macroeconomics
Di Maggio, Marco, Amir Kermani, Benjamin Keys, Tomasz Piskorski, Rodney Ramcharan, Amit Seru, and Vincent Yao. "Interest Rate Pass-Through: Mortgage Rates, Household Consumption, and Voluntary Deleveraging." American Economic Review 107, no. 11 (November 2017): 3550–3588. (Note: this is a combined version of working papers Monetary Policy Pass-Through: Household Consumption and Voluntary Deleveraging by M. Di Maggio, A. Kermani and R. Ramcharan previously Revise & Resubmit at American Economic Review and Mortgage Rates, Household Balance Sheets, and the Real Economy by B. Keys, T. Piskorski, A. Seru, and V. Yao previously Revise and Resubmit at Journal of Political Economy.)
- February 2010 (Revised March 2013)
- Case
Negotiating Trust: Borrowers, Lenders, and the Politics of Household Debt
By: Catherine S. M. Duggan and Alexander F. Roehrkasse
Duggan, Catherine S. M., and Alexander F. Roehrkasse. "Negotiating Trust: Borrowers, Lenders, and the Politics of Household Debt." Harvard Business School Case 710-048, February 2010. (Revised March 2013.)
- 16 May 2017
- News
Household Debt Is Higher Than It Was In 2008 — But Don't Panic
- February 2013
- Teaching Note
Negotiating Trust: Borrowers, Lenders, and the Politics of Household Debt (TN)
By: Catherine S. M. Duggan
- June 2023
- Article
Why Is Dollar Debt Cheaper? Evidence from Peru
By: Bryan Gutiérrez, Victoria Ivashina and Juliana Salomao
In emerging markets, a significant share of corporate loans are denominated in dollars. Using novel data that enables us to see currency and the cost of credit, in addition to several other transaction-level characteristics, we re-examine the reasons behind dollar...
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Keywords:
Emerging Market Corporate Debt;
Currency Mismatch;
Liability Dollarization;
Carry Trade;
Currency;
Emerging Markets;
Borrowing and Debt;
Interest Rates;
Peru
Gutiérrez, Bryan, Victoria Ivashina, and Juliana Salomao. "Why Is Dollar Debt Cheaper? Evidence from Peru." Journal of Financial Economics 148, no. 3 (June 2023): 245–272.
- June 2019
- Article
Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines
By: Dean Karlan, Sendhil Mullainathan and Benjamin Roth
A debt trap occurs when someone takes on a high-interest rate loan and is barely able to pay back the interest, and thus perpetually finds themselves in debt (often by refinancing). Studying such practices is important for understanding financial decision-making of...
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Keywords:
Borrowing and Debt;
Household;
Personal Finance;
Decision Making;
Behavior;
India;
Philippines
Karlan, Dean, Sendhil Mullainathan, and Benjamin Roth. "Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines." American Economic Review: Insights 1, no. 1 (June 2019): 27–42.
- 17 Jun 2011
- News
Devoted to Debt
- November 2017
- Article
Credit-Induced Boom and Bust
By: Marco Di Maggio and Amir Kermani
Can a credit expansion induce a boom and bust in house prices and real economic activity? This paper exploits the federal preemption of national banks in 2004 from local laws against predatory lending to gauge the effect of the supply of credit on the real economy....
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Keywords:
Great Recession;
Subprime;
Credit Supply;
Credit Expansion;
Household Leverage;
Household Debt;
Preemption Rule;
Mortgages;
Laws and Statutes;
Credit;
Household;
Borrowing and Debt;
Economic Slowdown and Stagnation
Di Maggio, Marco, and Amir Kermani. "Credit-Induced Boom and Bust." Review of Financial Studies 30, no. 11 (November 2017): 3711–3758. (Lead article and Editor's choice
Winner of the 2018 RFS Rising Scholar Award.)
- October 2019
- Article
Partial Deregulation and Competition: Effects on Risky Mortgage Origination
By: Marco Di Maggio, Amir Kermani and Sanket Korgaonkar
We exploit the OCC's preemption of national banks from state laws against predatory lending as a quasi-experiment to study the effect of deregulation and its interaction with competition on the supply of complex mortgages. Following the preemption ruling, national...
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Keywords:
Great Recession;
Subprime;
Complex Mortgages;
Credit Supply;
Household Debt;
Preemption Rule;
Competition;
Mortgages;
Government Legislation;
Credit;
Financial Crisis
Di Maggio, Marco, Amir Kermani, and Sanket Korgaonkar. "Partial Deregulation and Competition: Effects on Risky Mortgage Origination." Management Science 65, no. 10 (October 2019).
- 2012
- Chapter
Banking on Consumer Credit: Explaining Patterns of Household Borrowing in the United States and France
Keywords:
Credit;
Commercial Banking;
Personal Finance;
Borrowing and Debt;
Financing and Loans;
Consumer Behavior;
Banking Industry;
United States;
France
Trumbull, J. Gunnar. "Banking on Consumer Credit: Explaining Patterns of Household Borrowing in the United States and France." Chap. 7 in The Development of Consumer Credit in Global Perspective: Business, Regulation, and Culture, edited by Jan Logemann. New York: Palgrave Macmillan, 2012.
- 2019
- Working Paper
Fiscal Rules and Sovereign Default
By: Laura Alfaro and Fabio Kanczuk
Recurrent concerns over debt sustainability in emerging and developed nations have prompted renewed debate on the role of fiscal rules. Their optimality, however, remains unclear. We provide a quantitative analysis of fiscal rules in a standard model of sovereign debt...
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Alfaro, Laura, and Fabio Kanczuk. "Fiscal Rules and Sovereign Default." Harvard Business School Working Paper, No. 16-134, June 2016. (Also NBER Working Paper w23370. Revised January 2019.)
- Article
Credit Access and Social Welfare: The Rise of Consumer Lending in the United States and France
By: Gunnar Trumbull
Research into the causes of the 2008 financial crisis has drawn attention to a link between growing income inequality in the United States and high household indebtedness. Most accounts trace the U.S. idea of credit-as-welfare to the period of wage stagnation and...
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Keywords:
Household Finance;
Welfare State;
Credit;
Personal Finance;
Welfare;
Borrowing and Debt;
France;
United States
Trumbull, Gunnar. "Credit Access and Social Welfare: The Rise of Consumer Lending in the United States and France." Politics & Society 40, no. 1 (March 2012).
- 27 Jan 2011
- Working Paper Summaries
A Brief Postwar History of US Consumer Finance
- 2023
- Working Paper
Saving and Consumption Responses to Student Loan Forbearance
By: Justin Katz
How do households adjust savings and consumption in response to liquidity from debt relief? I study this question using policy variation induced by federal student loan forbearance in the 2020 CARES Act and an individual-level panel of daily financial transactions
for...
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Keywords:
Saving;
Consumer Behavior;
Borrowing and Debt;
Interest Rates;
Financial Liquidity;
Personal Finance;
Government Legislation
Katz, Justin. "Saving and Consumption Responses to Student Loan Forbearance." SSRN Working Paper Series, January 2023.
- 2024
- Working Paper
Corporate Debt, Boom-Bust Cycles, and Financial Crises
By: Victoria Ivashina, Sebnem Kalemli-Özcan, Luc Laeven and Karsten Müller
Using a new dataset on sectoral credit exposures covering financial and non-financial sectors in 115 economies over the period 1940–2014, we document the following evidence that corporate debt plays a key role in explaining boom-bust cycles, financial crises, and slow...
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Keywords:
Financial Crisis;
Economic Slowdown and Stagnation;
Economic Growth;
Economic Sectors;
Borrowing and Debt;
Credit
Ivashina, Victoria, Sebnem Kalemli-Özcan, Luc Laeven, and Karsten Müller. "Corporate Debt, Boom-Bust Cycles, and Financial Crises." NBER Working Paper Series, No. 32225, March 2024.
- 06 Feb 2009
- News
Keeping a keen eye on consumer behaviour
- 07 Sep 2010
- News
As Pay Falls, Borrowers Lose Ground
- September 2010 (Revised December 2010)
- Case
Santander Consumer Finance
By: J. Gunnar Trumbull, Elena Corsi and Andrew Barron
A Spanish company has to decide if they should expand into the fragmented European consumer finance market and has to make important organizational strategy decisions in the midst of the world economic downturn that followed the 2007 U.S. credit crunch. Since 2002, the...
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Keywords:
Borrowing and Debt;
Financial Markets;
International Finance;
Personal Finance;
Consolidation;
Corporate Strategy;
Expansion;
Financial Services Industry;
European Union;
Spain
Trumbull, J. Gunnar, Elena Corsi, and Andrew Barron. "Santander Consumer Finance." Harvard Business School Case 711-015, September 2010. (Revised December 2010.)
- Research Summary
Overview
By: Boris Vallee
Professor Vallée focuses on financial innovation, investigating it from different angles. This research thread has led him to relate the methods and insights of corporate finance and banking with those of other subfields, including household finance, public finance,...
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- 14 Oct 2014
- First Look
First Look: October 14
behave like money. We first present a simple model where households demand money services, which are supplied by three types of claims: deposits, Treasury bills, and asset-backed commercial paper (ABCP). The model provides predictions for...
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Keywords:
Sean Silverthorne