A General Equilibrium Analysis of Personal Bankruptcy Law

Dados Bibliográficos

ID9725614
AutoresUlf Lilienfeld‐Toal (University of Luxembourg), Ulf von Lilienfeld‐Toal (0000-0002-0568-2843, University of Luxembourg), Dilip Mookherjee (0000-0001-8719-0991, Boston University)
Ano2016
Volume83
Fascículo329
Páginas31-58
Data de publicação2016-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/ecca.12167
OpenAlexW2100664469
IdiomaEN
Citações recebidas1
Referências citadas29

We analyse an economy where principals and agents match and contract subject to moral hazard. Bankruptcy law defines the limited liability constraint in these contracts. We analyse Walrasian allocations to generate the following predictions: (i) weakening bankruptcy law causes redistribution of debt and welfare from poor agents and principals to rich agents; (ii) exemption limits Pareto-dominate other bankruptcy laws if project size is fixed; (iii) means-testing (as in recent US personal bankruptcy law) that is ex post pro-poor in intent makes the poor worse off ex ante

Actuarial science · Bankruptcy · Constraint (computer-aided design) · Debt · Economics · Ex-ante · Law and economics · Liability · Limited liability · Macroeconomics · Market economy · Microeconomics · Moral hazard · Pareto principle · Political science · Redistribution (election) · Welfare · Banking stability, regulation, efficiency · Corporate Insolvency and Governance · Finance · Housing Market and Economics · Law