Can digital repayment reminders reduce costly credit card delinquency? This paper analyzes data from a 2016 randomized controlled field trial of a reminder sent to 30-days-overdue credit card debtors via an app or online portal. The reminder significantly raised repayment rates, and amounts repaid, of high credit score delinquent debtors, but did not significantly raise the repayment rate of lower credit score delinquents. The reduction in average delinquency among treated debtors continues for at least 12 months after treatment and substantially reduces provisioning expenses of the credit provider. We find that 2.4 percentage points (CI 1.68–3.12) more treated than untreated debtors (64.3% compared with 61.9%) repay all arrears within the current repayment cycle. For the 84.4% of the sample who we observed logged in and saw the reminder, the effect rises to 2.7 percentage points (CI 1.95–3.50).

We propose an identified structural GARCH model to disentangle the dynamics of financial market crises. We distinguish between the hypersensitivity of a domestic market in crisis to news from foreign non-crisis markets, and the contagion imported to a tranquil domestic market from foreign crises. The model also enables us to connect unobserved structural shocks with their source markets using variance decompositions and to compare the size and dynamics of impulses during crises periods with tranquil period impulses. To illustrate, we apply the method to data from the 1997–1998 Asian financial crisis which consists of a complicated set of interacting crises. We find significant hypersensitivity and contagion between these markets but also show that links may strengthen or weaken. Impulse response functions for an equally-weighted equity portfolio show the increasing dominance of Korean and Hong Kong shocks during the crises and covariance responses demonstrate multiple layers of contagion effects.

Since 2008, the WTI oil futures curve has been positively sloped for extended periods. We test whether changes in inventory alone can explain this atypically long contango. To do this, we estimate monthly VARs of the CME WTI oil futures spread and OECD and U.S. inventory in line with standard theory, and add petroleum consumption and implied volatility to the vector of endogenous variables. When we model the futures spread as one continuous series, results confirm two-way causation between inventory and the futures curve, as predicted by the theory of storage. However when we separate negative and positive futures spreads we find that: two-way causation between the futures spread and U.S. inventory breaks down; shocks to OECD petroleum consumption cause more negative spreads and shocks to U.S. consumption cause more positive spreads in addition to inventory-driven changes; and increases in volatility directly raise positive spreads. These new causal channels have become significant since 2008 and can be related to higher inventory, inelastic supply of oil and uncertainty about global economic conditions.

Efficient investment of personal savings depends on clear risk disclosures. We study the propensity of individuals to violate some implications of expected utility under alternative “mass-market” descriptions of investment risk, using a discrete choice experiment. We found violations in around 25% of choices, and substantial variation in rates of violation, depending on the mode of risk disclosure and participants’ characteristics. When risk is described as the frequency of returns below or above a threshold we observe more violations than for range and probability-based descriptions. Innumerate individuals are more likely to violate expected utility than those with high numeracy. Apart from the very elderly, older individuals are less likely to violate the restrictions. The results highlight the challenges of disclosure regulation.

Detecting contagion during financial crises requires the demarcation of crisis periods. We develop a method for endogenously dating both the start and finish of crises, along with measuring contagion effects. Identification is achieved by coupling smooth transition functions with structural GARCH. In an application to US equity, bond and REIT returns for 2001–2010, we identify four phases; a pre-crisis period to July 2007, two phases of crisis up to and following October 2008, and a post-crisis phase from mid-May 2009. We detect significant contagion during the crisis and find evidence that the post-crisis period has not returned to pre-crisis relations.