Atlanta Fed: subprime bubble linked to numeracy
A paper published by the Atlanta Federal Reserve in April finds subprime borrowers with limited financial literacy are more likely to be delinquent on their mortgage and more likely to default.
The research finds a particular aspect of borrowers' financial literacy - their numerical ability - may have played a role in the massive defaults and foreclosures in the US subprime mortgage market.
The paper measures several aspects of financial literacy and cognitive ability in a survey of subprime
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