We use a long panel with information on expected and realized changes in household finances to study the process of … reversion). We show that these expectation patterns are in line with observed savings behavior. When individuals expect mean … reversion, they are too optimistic about the future; they reduce their savings and increase their borrowing, and they are more …

We study whether the level of household indebtedness is related to the interest rate elasticity of private consumption … even as the household sector's debt-to-income ratio has almost doubled in the past 20 years. Estimates based on the … household-level Finnish Wealth Survey suggest that the share of liquidity-constrained households has declined over the same time …