Paul Krugman attempts to play in the big leagues. Quotable:
There is a lot of relevant work that Eggertsson and Krugman are unaware of, or are ignoring. Bruce Smith spent his career working on models of credit market frictions in monetary frameworks. I [Stephen Williamson] have work closely related to Bernanke-Gertler, and predating it (including my 1987 JPE paper). Many people have studied related debt-constrained problems. These include Kehoe and Levine (1993) and Kocherlakota (1996). There is a large literature that uses standard incomplete markets models (e.g. Aiyagari QJE 1993) to study problems associated with bankruptcy.