Monetary Policy and Credit Card Spending

Francesco Grigoli () and Damiano Sandri

No 2022/255, IMF Working Papers from International Monetary Fund

Abstract: We analyze the impact of monetary policy on consumer spending using credit card data. Because of their high frequency, these data improve identification and allow for a precise characterization of the transmission lags. We find that shocks to short-term interest rates affect spending much more rapidly than shocks to longer-term interest rates. We also detect significant asymmetries. While interest rate rises are contractionary, interest rate cuts are unable to lift spending. Finally, by exploiting the disaggregation of credit card data, we uncover considerable heterogeneity in the effects of monetary policy across spending categories and a stronger impact on higher-income users.

Keywords: Credit card spending; heterogeneity; monetary policy; transmission; credit card data; IMF working paper research Department; interest rate cut; impact of monetary policy; interest rate rise; Consumer credit; Asset prices; Monetary tightening; Consumption; Negative interest rates (search for similar items in EconPapers)
Pages: 33
Date: 2022-12-16
New Economics Papers: this item is included in nep-ban, nep-mon and nep-pay
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Citations: View citations in EconPapers (3)

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Working Paper: Monetary policy and credit card spending (2023)
Working Paper: Monetary Policy and Credit Card Spending (2022)
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