The dynamics of work and debt
By: Jeffrey R. Campbell and Zvi Hercowitz.
Contributors: Hercowitz, Zvi.
Series: Working paper series ;; WP-2004-05; Working paper series (Federal Reserve Bank of Chicago. Research Dept. : Online) ;; WP-2004-05.
Publisher: Federal Reserve Bank of Chicago
Published: 2004
Place of publication: [Chicago, Ill.]
Language: eng
Format: Electronic resource
Description: "This paper characterizes the labor supply and borrowing of a household facing collateral requirements that limit its debt and compel it to accumulate equity in its durable goods stock.  The household's discount rate exceeds the market rate of interest, so it would otherwise finance increased current consumption by borrowing against future wages.  Collateral constraints generate a positive comovement between the household's debt, the stock of durable goods and labor supply following wage or interest rate shocks---as the household's labor supply adjusts to finance downpayments on new durable good purchases and the subsequent debt repayment.  Increasing the speed of debt repayment amplifies these movements"--Federal Reserve Bank of Chicago web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/29/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.