Research

This paper studies how corporate lending adjusts through new loan origination and the renegotiation of existing contracts, and the associated firm-level outcomes. Using approximately 100,000 loan-level observations from U.S. SEC filings, I document that financially stronger firms are more likely to originate loans, whereas weaker firms tend to renegotiate. This sorting intensifies during the Global Financial Crisis, when a larger fraction of firms becomes financially constrained, coinciding with a sharp rise in renegotiation when origination declines. Renegotiated credit remains relatively more accessible than new lending, and firms that renegotiate exhibit approximately 25% smaller deteriorations in default risk than non-renegotiating firms, conditional on firm characteristics and common financial conditions.

This paper studies household consumption responses to income shocks by jointly examining three measurement approaches widely used in the literature: (i) stated preferences from hypothetical scenarios, (ii) realized self-reports of actual income shocks, and (iii) revealed preferences inferred from observed behavior. Using granular data from the Bank of Italy’s Survey on Household Income and Wealth and exploiting the 2014 tax bonus as a source of plausibly exogenous income variation, this study documents systematic differences across methods. Marginal propensities to consume (MPCs) from realized self-reports and revealed-preference designs are consistently higher than those obtained from hypothetical settings. The role of household financial conditions also varies across elicitation methods: in hypothetical settings, households with higher debt and liquid asset holdings report lower spending, whereas in realized and observed settings, consumption changes are more strongly associated with indicators of acute liquidity stress. These findings highlight that MPC estimates obtained using standard empirical designs reflect distinct measurement environments, with implications for the interpretation of household consumption behavior.