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Estimates of the demand for US consumer borrowings

Author

Listed:
  • Paradiso, Antonio
  • Rao, B. Bhaskara

Abstract

This paper explains non-mortgage borrowing by U.S. households with demand-side factors, viz. disposable income, wealth and interest rate. The life cycle hypothesis and a standard two period consumption model are the basis of our theoretical model. We find with the cointegration techniques that current disposable income, past wealth, and interest rate explain consumer borrowing over 50 years.

Suggested Citation

  • Paradiso, Antonio & Rao, B. Bhaskara, 2011. "Estimates of the demand for US consumer borrowings," MPRA Paper 32562, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32562
    as

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    File URL: https://mpra.ub.uni-muenchen.de/32562/1/MPRA_paper_32562.pdf
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    References listed on IDEAS

    as
    1. Fama, Eugene F, 1970. "Multiperiod Consumption-Investment Decisions," American Economic Review, American Economic Association, vol. 60(1), pages 163-174, March.
    2. Sydney C. Ludvigson & Charles Steindel, 1999. "How important is the stock market effect on consumption?," Economic Policy Review, Federal Reserve Bank of New York, vol. 5(Jul), pages 29-51.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    consumer borrowing; disposable income; wealth; interest rates; US economy;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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