Purpose: When confronted by high-stakes challenges that require a change of course leaders need fast, high-quality decisions and genuine team alignment on the path forward. To address this problem, we offer an experience-tested framework for confronting defining moments of high complexity, low...

In recent research on financial crises, large exogenous shocks to total factor productivity (TFP) are used as the driving force accounting for large output falls. TFP fell 3% after the Korean 1997 financial crisis. We find evidence that the large fall in TFP is mostly due to a sectoral...

This paper studies the aggregate welfare consequences of changes in the prescribed penalty for personal bankruptcy and in social insurance policies when borrowing limits may respond to these changes. It uses a dynamic general equilibrium model of an exchange economy with incomplete markets and a...

Abstract This paper extends a model of endogenous growth through the introduction of a component of knowledge that makes new technologies more productive than older vintages. Creative destruction or obsolescence of technologies underlies the growth process. In this setup, the growth effects of...

Credit cards offer a limit, rather than a specific loan size, at a pre-approved interest rate. This paper studies the determination of these credit limits jointly with default in the presence of one-period debt. I adapt the standard incomplete markets macroeconomic model of one-period unsecured...

This paper studies economies with complete markets where there is positive default on consumer debt. In a simple tractable two-period model, households can default partially, at a finite punishment cost, and competitive intermediaries price loans of different sizes separately. This environment...