Discussion Paper
When Debts Compete, Which Wins?
Plosser, Matthew; Conway, Jacob (2017-03-01)
When faced with financial hardship, borrowers might choose to repay some debts while falling behind on others?potentially going into default. Such choices provide insight into consumers? spending priorities and can help us better understand the condition of borrowers under financial distress. In this post, we examine how consumers prioritize their default choices. Do consumers under financial stress default on their credit cards first? Or are they more likely to default on their mortgage?
Liberty Street Economics , Paper 20170301