A General Equilibrium Analysis of Personal Bankruptcy Law

Datos 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)
Año2016
Volumen83
Número329
Páginas31-58
Fecha de publicación2016-01-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaEconomica (JOURNAL)
Identificadores de la revistaISSN: 0013-0427 • E-ISSN: 1468-0335
EditorialWiley (PUBLISHER • GB)
DOI10.1111/ecca.12167
OpenAlexW2100664469
IdiomaEN
Citas recibidas1
Referencias 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