53 Pages Posted: 12 Dec 2010
Date Written: December 10, 2010
This article describes the consumer finance sector in the US since World War II. We first define the sector in terms of the functions delivered by firms (payments, savings/investing, borrowing, managing risk, and providing advice.) We provide time series evidence on major trends in consumption, savings, and borrowing. Examining consumer decisions, changes in regulation, and business practices, we identify four major themes that characterize the sector: (a) innovation that increased the choices available to consumer; (b) enhanced access in the form of broadening participation of consumers in financial activities, (c) do-it-yourself consumer finance, which allowed and forced consumers to take greater responsibility for their own financial lives, and (d) the resultant increase in household risk taking.
Suggested Citation: Suggested Citation
Ryan, Andrea and Trumbull, Gunnar and Tufano, Peter, A Brief Postwar History of US Consumer Finance (December 10, 2010). Harvard Business School BGIE Unit Working Paper No. 11-058; Harvard Business School Finance Working Paper No. 11-058. Available at SSRN: https://ssrn.com/abstract=1723397 or http://dx.doi.org/10.2139/ssrn.1723397