The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit

10 Pages Posted: 20 May 2013

See all articles by Meta Brown

Meta Brown

Federal Reserve Bank of New York

Andrew Haughwout

Federal Reserve Bank of New York

Donghoon Lee

Federal Reserve Bank of New York; New York University

Wilbert van der Klaauw

Federal Reserve Bank of New York; IZA

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2013

Abstract

Since the onset of the financial crisis, households have reduced their outstanding debt by about $1.3 trillion. While part of this reduction stemmed from a historic increase in consumer defaults and lender charge-offs, particularly on mortgage debt, other factors were also at play. An analysis of the New York Fed’s Consumer Credit Panel — a rich new data set on individual credit accounts — reveals that households actively reduced their obligations during this period by paying down their current debts and reducing new borrowing. These household choices, along with banks’ stricter lending standards, helped drive this deleveraging process.

Keywords: household debt, mortgages, household finance, financial crisis

JEL Classification: G20, D14, D12

Suggested Citation

Brown, Meta and Haughwout, Andrew F. and Lee, Donghoon and van der Klaauw, H. Wilbert, The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit (May 1, 2013). Current Issues in Economics and Finance, Vol. 19, No. 2, 2013. Available at SSRN: https://ssrn.com/abstract=2267394 or http://dx.doi.org/10.2139/ssrn.2267394

Meta Brown (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
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Andrew F. Haughwout

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2685 (Phone)
212-720-1844 (Fax)

Donghoon Lee

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-8699 (Phone)
212-720-1844 (Fax)

New York University

NY
United States

H. Wilbert Van der Klaauw

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-5916 (Phone)
212-720-1844 (Fax)

IZA ( email )

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