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We study, theoretically and quantitatively, the equilibrium of an economy with unsecured consumer credit with the following features. Credit-suppliers take deposits at a given interest rate and offer loans to households via a menu of credit levels and associated interest rates. The loan industry is competitive, with free entry and zero costs, and borrowers(More)
I quantitatively study the optimal capital income taxation in the general equilibrium overlapping generations model with uninsurable idiosyncratic income shocks and with housing and financial assets. Following key characteristics of housing are explicitly modeled: (i) housing is held for the dual purpose of consumption and savings, (ii) housing can be(More)
The standard Mortensen-Pissarides model of search and matching is extended by introducing capital, risk-averse workers, labor-leisure choice and lack of complete markets to insure away unemployment shocks. The business cycle properties of the model with aggregate productivity shocks are explored, with an emphasis on labor market dynamics. In particular, I(More)
We build a New Keynesian model in which heterogeneous workers differ with regard to their employment status due to search and matching frictions in the labor market, their potential labor income, and their amount of savings. We use this laboratory to quantitatively assess who stands to win or lose from unanticipated monetary accommodation and who benefits(More)
Incomplete Abstract This paper studies cyclical properties of worker flows and job flows simultaneously in a multiple-worker version of the search/matching model where firms decide how many workers they hire or shed under the presence of idiosyncratic and aggregate uncertainties. Wages are determined by intra-firm bargaining between a firm and its multiple(More)
The private market of student loans has become an important source of college financing in the U.S. Unlike government student loans, the terms on private student loans (i.e., credit limits and interest rates) are based on credit scores We quantify the effects of credit scores on college investment in a heterogeneous life-cycle economy that exhibits a(More)
Retired homeowners dissave more slowly than renters, which suggests that homeownership affects retirees' saving decisions. We investigate empirically and theoretically the life-cycle patterns of homeownership, housing and nonhousing assets in retirement. Using an estimated structural model of saving and housing decisions, we find, first, that homeowners(More)
This paper estimates a dynamic model of durable and non-durable consumption choice and default behavior in an economy where risky borrowing is allowed and bankruptcy protection is regulated by law. I exploit the substantial difference in the generosity of bankruptcy exemptions across the U.S. states to assess the role of durable goods as both informal(More)