Determinants of Credit to Households in a Life-Cycle Model
National Bank of Poland Working Paper No. 92
42 Pages Posted: 4 Aug 2011 Last revised: 8 Jul 2016
There are 2 versions of this paper
Determinants of Credit to Households in a Life-Cycle Model
Determinants of Credit to Households in a Life-Cycle Model
Date Written: July 1, 2011
Abstract
This paper applies a life-cycle model with individual income uncertainty to investigate the determinants of credit to households. We show that the value of household credit to GDP ratio depends on (i) the lending-deposit interest rate spread, (ii) individual income uncertainty, (iii) individual productivity persistence, and (iv) the generosity of the pension system. Subsequently, we provide empirical evidence for the predictions of the theoretical model on the basis of data for OECD and EU countries.
Keywords: household credit, life cycle economies, banking sector
JEL Classification: E21, E43, E51
Suggested Citation: Suggested Citation
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