Household Debt: Facts, Puzzles, Theories, and Policies

Posted: 7 Aug 2015

See all articles by Jonathan Zinman

Jonathan Zinman

Dartmouth College; Innovations for Poverty Action; Jameel Poverty Action Lab; National Bureau of Economic Research (NBER)

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Date Written: August 2015

Abstract

Borrowing decisions affect most households, with large stakes and implications for research subfields as varied as macroeconomics and industrial organization. I review theoretical and empirical work on household debt: its prevalence, level, growth, and composition, as well as various measures of consumer choice and market (in)efficiency, elasticities, and prices, including new evidence on how borrowing heterogeneity affects the distribution of the opportunity cost of consumption. I also discuss opportunities and challenges in policy evaluation. A key takeaway is that puzzles abound, and I highlight numerous avenues for further research.

Suggested Citation

Zinman, Jonathan, Household Debt: Facts, Puzzles, Theories, and Policies (August 2015). Annual Review of Economics, Vol. 7, pp. 251-276, 2015. Available at SSRN: https://ssrn.com/abstract=2640082 or http://dx.doi.org/10.1146/annurev-economics-080614-115640

Jonathan Zinman (Contact Author)

Dartmouth College ( email )

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