Income Redistribution, Consumer Credit,and Keeping up with the Riches

Arbeitspapier

In this study, the relation between consumer credit and real economic activity during the Great Moderation is studied in a dynamic stochastic general equilibrium model. Our model economy is populated by two different household types. Investors, who hold the economy's capital stock, own the firms and supply credit, and workers, who supply labor and demand credit to finance consumption. Furthermore, workers seek to minimize the difference between investors' and their own consumption level. Qualitatively, an income redistribution from labor to capital leads to consumer credit dynamics that are in line with the data. As a validation exercise, we simulate a three-shock version of the model and find that our theoretical set-up is able to reproduce important business cycle correlations.

Angaben zum Objekt

• ISBN: 978-3-86788-584-6
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Ruhr Economic Papers ; No. 509

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Business Fluctuations; Cycles ; Financial Markets and the Macroeconomy
• Thema: income redistribution ; consumer credit ; relative consumption motive ; business cycles

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Klein, Mathias ; Krause, Christopher
• Ereignis: Veröffentlichung
• (wer): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (wo): Essen
• (wann): 2014

Weitere Informationen

• DOI: doi:10.4419/86788584
• Handle: http://hdl.handle.net/10419/103321
• Letzte Aktualisierung: 10.03.2025, 11:46 MEZ