Munich Personal RePEc Archive

Estimates of the demand for US consumer borrowings

Paradiso, Antonio and Rao, B. Bhaskara (2011): Estimates of the demand for US consumer borrowings.


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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.

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