https://macropaperwarehouse.com/authors/diego-jimenez-hernandez/Diego Jiménez-HernándezHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/contract-terms-employment-shocks-and-default-in-credit-cards/https://macropaperwarehouse.com/papers/contract-terms-employment-shocks-and-default-in-credit-cards/<p><strong>Research Question</strong></p> <p>This paper asks two related questions bearing on financial inclusion policy in developing countries: (1) How effective are credit card contract term changes — specifically interest rate reductions and minimum payment increases — in limiting default among new borrowers? (2) How large is the effect of formal-sector job loss on default relative to these contract term interventions, and can the difference in magnitudes be explained by differential cash flow impacts?</p>