Credit card debt puzzles
Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an 'accountant-shopper' framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework can actually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers.
Year of publication: |
2005
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Authors: | Haliassos, Michael ; Reiter, Michael |
Publisher: |
Frankfurt a. M. : Goethe University Frankfurt, Center for Financial Studies (CFS) |
Subject: | Kreditkarte | Schulden | Theorie | Credit Cards | Debt | Self Control | Household Portfolios |
Saved in:
freely available
Series: | CFS Working Paper ; 2005/26 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 515326143 [GVK] hdl:10419/25462 [Handle] RePEc:zbw:cfswop:200526 [RePEc] |
Classification: | E21 - Consumption; Saving ; G11 - Portfolio Choice |
Source: |
Persistent link: https://www.econbiz.de/10010298310