Laibson, David; Repetto, Andrea; Tobacman, Jeremy - Centro de Economía Aplicada, Universidad de Chile - 2000
Over 60% of US households with credit cards are currently borrowing |i.e., paying interest |on those cards (Gross and Souleles 2000). We attempt to reconcile the high rate of credit card borrowing with observed levels of lifecycle wealth accumulation. We simulate a lifecycle model with five...