Arbeitspapier
Consumption Response to Credit Expansions: Evidence from Experimental Assignment of 45,307 Credit Lines
I design a large-scale field experiment that constructs a randomized credit limit extension isolating selection, anticipation, wealth, and interest rate effects and study the impulse responses on spending, contract choice, and balance sheets. Participants borrow to spend 11 cents on the dollar in the quarter of the limit increase, with a cumulative difference of 28 cents by the third year. The effects extend to those far from the limit, those who had the new limits as available credit, and those with a meaningful buffer of liquid assets. Participants near their limits borrow and spend when limits are relaxed but put off spending and save out of constraints under the counterfactual when limits are tight. The findings provide strong support for a buffer-stock interpretation that emphasizes the importance of precautionary saving.
- Language
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Englisch
- Classification
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Wirtschaft
Intertemporal Household Choice; Life Cycle Models and Saving
Macroeconomics: Consumption; Saving; Wealth
Money Supply; Credit; Money Multipliers
Fiscal Policies and Behavior of Economic Agents: Household
- Subject
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consumption
credit
MPC
randomized field experiment
precautionary saving
- Event
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Geistige Schöpfung
- (who)
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Aydın, Deniz
- Event
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Veröffentlichung
- (who)
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ZBW - Leibniz Information Centre for Economics
- (where)
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Kiel, Hamburg
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Aydın, Deniz
- ZBW - Leibniz Information Centre for Economics
Time of origin
- 2021
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The Earned Income Tax Credit and food consumption patterns
Consumption Response to Credit Expansions : Evidence from Experimental Assignment of 45,307 Credit Lines
Electrophysiological correlates of reinforcement learning and credit assignment
Credit assignment in multiple goal embodied visuomotor behavior
Consumption, credit, and the missing young
Strength or accuracy : credit assignment in learning classifier systems
When Credit Expansions Become Troublesome: The Story of Investor Sentiments
Electrophysiological correlates of reinforcement learning and credit assignment : [cumulative dissertation]
Job Loss, Credit Constraints and Consumption Growth
Consumption velocity in a cash costly-credit model
Agricultural credit : = Crédit agricole
Credit constraints and durable consumption: A new empirical approach