Determinants of Credit to Households in a Life-Cycle Model

Rubaszek, Michał; Serwa, Dobromil

Determinants of Credit to Households in a Life-Cycle Model

ECB Working Paper No. 1420

43 Pages Posted: 6 Feb 2012

See all articles by Michał Rubaszek

Michał Rubaszek

National Bank of Poland; Warsaw School of Economics (SGH)

Dobromil Serwa

National Bank of Poland; Warsaw School of Economics (SGH)

There are 2 versions of this paper

Date Written: January 30, 2012

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 the lending-deposit interest rate spread, individual income uncertainty, individual productivity persistence, and 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

Rubaszek, Michal and Serwa, Dobromil, Determinants of Credit to Households in a Life-Cycle Model (January 30, 2012). ECB Working Paper No. 1420. Available at SSRN: https://ssrn.com/abstract=1995540