Credit Constraints and Durable Consumption

22 Pages Posted: 19 Oct 2010

See all articles by Risto Herrala

Risto Herrala

European Central Bank (ECB) - Directorate General International and European Relations

Date Written: September 20, 2010

Abstract

I find quantitative evidence of a significant effect for credit constraints on durable consumption during a post-deregulation consumer spending spree. The effect varied markedly across age and educational groups. Young households with low levels of education displayed high sensitivity to credit conditions. In contrast, older highly educated households were relatively immune to credit market developments.

Keywords: Durable Consumption, Credit Constraints, Stochastic Frontier Analysis

JEL Classification: D12, D91, E21

Suggested Citation

Herrala, Risto, Credit Constraints and Durable Consumption (September 20, 2010). Bank of Finland Research Discussion Paper No. 15/2010, Available at SSRN: https://ssrn.com/abstract=1693850 or http://dx.doi.org/10.2139/ssrn.1693850

Risto Herrala (Contact Author)

European Central Bank (ECB) - Directorate General International and European Relations ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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