@article{UnsecuredDebt:1462,
      recid = {1462},
      author = {Meh, Césaire and Terajima, Yaz},
      title = {Unsecured Debt, Consumer Bankruptcy, and Small Business},
      publisher = {Bank of Canada},
      address = {2008},
      pages = {1 online resource (iii, 28 pages)},
      abstract = {In this paper we develop a quantitative model of  entrepreneurial activity (risk-taking) and consumer  bankruptcy choices and use the model to study the effects  of bankruptcy regulations on entrepreneurial activity,  bankruptcy rate and welfare. We show that eliminating  bankruptcy exemptions leads to a modest increase in the  fraction of entrepreneurs, a large decrease in the overall  bankruptcy rate and a significant welfare gain. In  contrast, eliminating the whole consumer bankruptcy system  leads to a large fall in the fraction of entrepreneurs and  a substantial welfare loss. These two findings suggest that  the consumer bankruptcy system is desirable but it must be  well-designed with regard to bankruptcy asset exemptions.  In particular, excessive bankruptcy exemptions can be  counter-productive. Finally, we argue that entrepreneurial  activity is important when studying different bankruptcy  rules or regulations.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1462},
      doi = {https://doi.org/10.34989/swp-2008-5},
}