The government does not track default rates among online lenders, which disclose little on their own."We are worried that in an environment where there is no effective credit system, people tend to overborrow
, especially when capital comes in," said Bai Chengyu, an executive at the China Association of Microfinance, who is no relation to Bai Shichao.
But a second historical lesson from Reinhart and Christoph Trebesch (2015) is that Greece has been prone to quickly overborrow
again as soon as the previous debt crisis has been overcome.
Some students "overborrow
," taking out student loans that are beyond the manageable level of their eventual post-college job prospects and income.
On this view, states systematically overborrow
as they try to impose the losses associated with bad fiscal conditions on sister states through the use of federal-government resources.
, often because consumers have a tendency to focus too
(69) They argue that these sorts of restrictions are likely to be palatable because they benefit the unsophisticated consumers--those who overborrow
and must pay these penalties--and have no effect on sophisticated consumers who would not have to pay these penalties in any event.
Countries like Austria, Canada, the Philippines, Lesotho and Uruguay cannot match the world's growth champions, because they do not overborrow
or sustain a mercantilist economic model.
quasi-sovereign debtor's propensity to overborrow
and engage in
Their current attitude probably won't alter this year, and indeed there is a suggestion that the government would actually prefer to see property prices stagnate now for a period of several years, allowing property to become slowly more affordable again by way of gradually rising average earnings, rather than engineering an artificial quick fix today which would probably only cause people to overborrow
Since the ESCO receives no payments from the agency until the equipment is installed and accepted, the ESCO must overborrow
in order to make interest payments on the loan during the construction period.
Abstract: Credit constraints that link a private agent's debt to market-determined prices embody a credit externality that drives a wedge between competitive and constrained socially optimal equilibria, inducing private agents to overborrow
. The externality arises because agents fail to internalize the debt-deflation effects of additional borrowing when negative income shocks trigger the credit constraint.
(278) Therefore, even if a consumer is aware of her tendency to overborrow
, she might be able to do very little about it.