Procrastination on August 17, 2017

Should-Read: Will Dobbie and Jae Song: Targeted debt relief and the origins of financial distress: Experimental evidence from distressed credit card borrowers: "We identify the separate effects of the payment reductions and debt write-downs using variation from both the experiment and cross-sectional differences... http://equitablegrowth.org/working-papers/targeted-debt-relief-and-financial-distress/

...Debt write-downs significantly improved both financial and labor market outcomes despite not taking effect for three to five years. In sharp contrast, there were no positive effects of the more immediate payment reductions. These results run counter to the widespread view that financial distress is largely the result of short-run constraints...

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