Search Results
Working Paper
Household Financial Distress and the Burden of 'Aggregate' Shocks
The goal of this paper is to show that household-level financial distress (FD) varies greatly, meaning there is unequal exposure to macroeconomic risk, and that FD can increase macroeconomic vulnerability. To do this, we first establish three facts: (i) regions in the U.S. vary significantly in their "FD-intensity," measured either by how much additional credit households therein can access, or in how delinquent they typically are on debts, (ii) shocks that are typically viewed as "aggregate" in nature hit geographic areas quite differently, and (iii) FD is an economic "pre-existing ...
Journal Article
The Evolving Relationship between COVID-19 and Financial Distress.
During most of the COVID-19 pandemic, regions with high financial distress saw disproportionately more infections and deaths than regions with low financial distress. As of February 2021, cumulative infections appear more evenly distributed. However, total deaths remain higher in financially distressed regions.
COVID-19 and Financial Distress: Vulnerability to Infection and Death
Although COVID-19 initially spread faster in areas with low financial distress, evidence suggests that infections may spread most rapidly in highly financially distressed areas moving forward.
Working Paper
Consumption in the Great Recession: The Financial Distress Channel
During the Great Recession, the collapse of consumption across the U.S. varied greatly but systematically with house-price declines. We find that financial distress among U.S. households amplified the sensitivity of consumption to house-price shocks. We uncover two essential facts: (1) the decline in house prices led to an increase in household financial distress prior to the decline in income during the recession, and (2) at the zip-code level, the prevalence of financial distress prior to the recession was positively correlated with house-price declines at the onset of the recession. Using ...
Working Paper
Consumption in the Great Recession: The Financial Distress Channel
During the Great Recession, the collapse of consumption across the US varied greatly but systematically with house-price declines. Our message is that household financial health matters for understanding this relationship. Two facts are essential for our finding: (1) the decline in house prices led to an increase in household financial distress (FD) prior to the decline in income during the recession, and (2) at the zip-code level, the prevalence of FD prior to the recession was positively correlated with house-price declines at the onset of the recession. We measure the power of the ...
Working Paper
Extreme Wildfires, Distant Air Pollution, and Household Financial Health
We link detailed wildfire burn, satellite smoke plume, and ground-level pollution data to estimate the effects of extreme wildfire and related smoke and air pollution events on housing and consumer financial outcomes. Findings provide novel evidence of elevated spending, indebtedness, and loan delinquencies among households distant from the burn perimeter but exposed to high levels of wildfire-attributed air pollution. Results also show higher levels of financial distress among renters in the burn zone, particularly those with lower credit scores. Financial distress among homeowners within ...
COVID-19 and Financial Distress: Employment Vulnerability
The burden of COVID-19 will likely be borne unevenly, with the largest financial burdens potentially hitting populations already vulnerable to economic shocks.
Working Paper
Household Financial Distress and the Burden of “Aggregate” Shocks
The goal of this paper is to show that household-level financial distress (FD) varies greatly, meaning there is unequal exposure to macroeconomic risk, and that FD can increase macroeconomic vulnerability. To do this, we first establish three facts: (i) regions in the U.S. vary significantly in their "FD-intensity," measured either by how much additional credit households therein can access, or in how delinquent they typically are on debts, (ii) shocks that are typically viewed as "aggregate" in nature hit geographic areas quite differently, and (iii) FD is an economic "preexisting ...
Ready for the Pandemic? Household Debt before the COVID-19 Shock
Before the pandemic, shares of delinquencies had already been growing in consumer finance loans, credit card debt, student loans and auto loans. And delinquencies can vary greatly among states.
Working Paper
Consumption in the Great Recession: The Financial Distress Channel
During the Great Recession, the collapse of consumption across the U.S. varied greatly but systematically with house-price declines. We find that financial distress among U.S. households amplified the sensitivity of consumption to house-price shocks. We uncover two essential facts: (1) the decline in house prices led to an increase in household financial distress prior to the decline in income during the recession, and (2) at the zip-code level, the prevalence of financial distress prior to the recession was positively correlated with house-price declines at the onset of the recession. Using ...