Europe and to variations in the demand for black money balances in Europe as a whole. We reject the view that the strength of …

financial frictions that result in endogenous credit constraints. The analysis is based on numerical simulations of a two … credit constraints are very costly distortions. The mean welfare gains of eliminating policy uncertainty range between 6 ….4 and 9 percent of the trend level of consumption per capita. The mean welfare gain of weakening credit frictions is about 4 …

used during a credit boom to reduce the expected costs of a financial crisis …

Standard economic theory says that unsecured, high-interest, short-term debt — such as borrowing via credit cards and … income shock of unemployment. Instead, individuals smooth their credit card debt and overdrafts by adjusting consumption. We … first use detailed longitudinal information on debit and credit card transactions, account balances, and credit lines from a …