Showing papers by "Alexander W. Butler published in 2022"
TL;DR: The authors found that Black and Hispanic applicants' approval rates are 1.5 percentage points lower than white applicants, even after controlling for creditworthiness, and that this effect crowds out 80,000 minority loans each year.
Abstract:
We document racial disparities in auto lending. Combining credit bureau records with borrower characteristics, we find that Black and Hispanic applicants’ approval rates are 1.5 percentage points lower, even after controlling for creditworthiness. In aggregate, this effect crowds out 80,000 minority loans each year. Results are stronger where racial biases are more prevalent and lending competition is lower. Minority borrowers pay 70-basis-point higher interest rates, but default less ceteris paribus, consistent with racial bias rather than statistical discrimination. A major antidiscrimination enforcement policy initiated in 2013, but halted in 2018, reduced unexplained racial differences in interest rates by 60%.
6 citations
TL;DR: In this article , the impact of population aging on municipal access to credit is examined and the authors highlight the challenges municipalities face to cope with systemic demographic transition, highlighting the need for municipalities to adopt appropriate tax revenue, healthcare spending, and pension liabilities.
3 citations
TL;DR: In this article , the authors show that the changing composition of investors in the corporate bond market influences bond maturities, and the results of a Granger causality test, an instrumental variable approach, and a natural experiment suggest that a decline in the insurance companies' ownership share in the market explains a significant part of the unexplained maturity decline.
Abstract: Abstract The average maturity of newly issued corporate bonds has declined substantially over the past 40 years, and the traditional determinants of debt maturity fail to explain this decline fully. We show that the changing composition of investors in the corporate bond market influences bond maturities. The results of a Granger causality test, an instrumental variable approach, and a natural experiment suggest that a decline in the insurance companies’ – which prefer long-term bonds – ownership share in the corporate bond market explains a significant part of the unexplained maturity decline. These findings illustrate how investor preferences can have real effects on corporations.
1 citations