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Journal Article
Credit Expansion and Markups
This article documents new empirical facts about the effects of credit expansion on the aggregate markup and markup dispersion in the United States. We use U.S. macroeconomic data and Jordà 's local projection and single-equation estimation methods. The results for both methods show that the aggregate markup and markup dispersion increase in response to both a firm debt shock and a household debt shock. The previous literature mostly focused on the effect of firm debt financing on firm markups. Extending previous research, our study shows that household credit expansion also plays a role in ...
Working Paper
The Consequences of Student Loan Credit Expansions: Evidence from Three Decades of Default Cycles
This paper studies the link between credit availability and student loan repayment using administrative federal student loan data. We demonstrate that expansions and contractions in federal student loan credit to institutions with high default rates explain most of the time series variation in student loan defaults between 1980 and 2010. Expansions in loan eligibility between 1976 and 1988 led to the entry of new, high-risk institutions, and default rates exceeding 30 percent in the late 1980s. Credit access was subsequently tightened through strict institutional and student accountability ...