We use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on … same shock leads to a cumulative increase of almost 150 basis points after 10 years. The effect of debt on interest rates … is non-linear: only for countries with above-average levels of debt does an increase in debt affect the interest rate …

advantages of debt against the risk of costly default. The costs of default are endogenous: bankrupt firms are forced to …, firms’ investment is too low and, although the capital structure is chosen optimally, in equilibrium too little debt is used …

as inside equity and debt. We call our framework the two-stage model of firm growth. A key finding is that outside equity … promotes ex post efficiently (second stage growth) at the expense of ex ante efficiently (first stage growth) which debt work … the opposite way. This is because equity promotes replacement of the entrepreneur, while debt promotes entrenchment. So …

wealth households but high relative measures of wealth inequality. Italian households hold very little debt and are much more … to hold much more housing debt well into retirement. Increases in owner occupation and house prices 2000-05 in the UK has … composition, educational attainment and income as well as wealth and debt portfolios. Educational loans are increasing in their …

, trading off the tax advantages of debt against the risk of costly default. The costs of bankruptcy are endogenously determined … constrained inefficient. In particular there is too little debt and too little default. …