People suffer financial distress when they face financial and non-financial difficulties from repaying their outstanding debts. This paper analyses the prevalence of financial distress, how this distress is related to consumer credit use, and whether financial distress can be predicted. We aim...

In a calibrated consumption-portfolio model with stock, housing, and labor income predictability, we disentangle the welfare effects of skill and luck. Skilled investors are able to take advantage of all sources of predictability, whereas unskilled investors ignore predictability. Lucky...