This paper proposes a quantitative theory of unsecured borrowing via credit cards. We explicitly model key features of credit cards: (i) they are pre-approved lines of credit, (ii) they are long-lasting relationships with endogenous duration. We endogenize duration by modeling explicit frictions...

What contributes to the growing income inequality across U.S. households? We develop an information- based general equilibrium model that links capital income derived from financial assets to a level of investor sophistication. Our model implies income inequality between sophisticated and...

This paper evaluates the performance of leading micro-founded pricing-to-market frictions vis-a-vis a set of robust stylized facts about international prices. In order to make that evaluation meaningful, we embed each friction into a unified IRBC framework and parameterize the models in a...

The article develops a new theory of pricing to market driven by dynamic frictions of building market shares. Our key innovation is a capital theoretic model of marketing in which relations with customers are valuable. We discipline the introduced friction using data on differences between...

This paper develops a new theory of pricing-to-market driven by sluggish market shares. Our key innovation is a capital theoretic model of marketing in which relations with the customers are valuable. We discipline the introduced friction using a unique prediction of the model about the low...

massive increase in the credit card solicitations.

reductions.

Using a comprehensive panel dataset on U.S. households, we study the effects of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the most substantive reform of personal bankruptcy in the United States since the Bankruptcy Reform Act of 1978. The 2005 legislation...