Determinants of Credit to Households: An Approach Using the Life-Cycle Model

Posted: 31 Oct 2015

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)

Date Written: 2014

Abstract

This paper applies a life-cycle model with individual income uncertainty in order to investigate the determinants of credit to households. We show that the household credit to GDP ratio depends on the lending-deposit interest rate spread, individual income uncertainty, and individual income persistence. We subsequently provide empirical evidence for the prediction of a theoretical model on the basis of data from OECD and EU countries.

Keywords: Household credit, Life-cycle economies, Banking sector

JEL Classification: E21, E43, E51

Suggested Citation

Rubaszek, Michal and Serwa, Dobromil, Determinants of Credit to Households: An Approach Using the Life-Cycle Model (2014). Economic Systems, Vol. 38, No. 4, 2014. Available at SSRN: https://ssrn.com/abstract=2683466

Michal Rubaszek

National Bank of Poland ( email )

00-919 Warsaw
Poland

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

Dobromil Serwa (Contact Author)

National Bank of Poland ( email )

00-919 Warsaw
Poland

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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