We exploit the staggered and discontinuous changes in interest rates among adjustable rate mortgages to identify the effects of foreclosures independently of housing prices. First, interest rate resets predict foreclosure, accounting for up to 18% of the change in foreclosures. Second, a 10%...

Limited liability has long been recognized to incentivize owners of firms near bankruptcy to take suboptimal care to prevent harm to third parties. I use violations of the Clean Water Act to study these incentives. I show that as firms approach bankruptcy (as measured by their credit ratings)...

How do firms' efforts to prevent harm to third parties change as they approach, enter, and then exit bankruptcy? To help answer this, I investigate a panel of roughly 350 US firms, all of which declare bankruptcy and are regulated under the Clean Water Act (CWA) for pollutants they release into...