Search Results
Working Paper
Mortgage Design, Repayment Schedules, and Household Borrowing
How does the design of debt repayment schedules affect household borrowing? To answer this question, we exploit a Swedish policy reform that eliminated interest-only mortgages for loan-to-value ratios above 50%. We document substantial bunching at the threshold, leading to 5% less borrowing. Wealthy borrowers drive the results, challenging credit constraints as the primary explanation. We develop a model to evaluate the mechanisms driving household behavior and find that much of the effect comes from households experiencing ongoing flow disutility to amortization payments. Our results ...
Discussion Paper
Debt Payments and Spending: Evidence from the 2023 Student Loan Payment Restart
In October 2023, roughly 40 million Americans faced a new monthly bill as federal student loan payments resumed after a three-year pandemic-induced pause. The restart of loan payments effectively reduced disposable income for borrowers, raising a critical question: How do debt payments affect household spending?
Discussion Paper
Wealth Heterogeneity and Consumer Spending
Economists have become increasingly interested in the effects of household heterogeneity on macroeconomic dynamics. Changes in the distribution of income and wealth, coupled with advances in data and computation, have brought questions about how heterogeneity affects macroeconomic dynamics to the forefront of the discipline.