WHAT DO STIMULUS PACKAGES MEAN FOR CONSUMER CREDIT MARKETS?

Maria Olivero and Mikheil Dvalishvili
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Mikheil Dvalishvili: The Graduate Center, Postal: CUNY

No 2021-5, School of Economics Working Paper Series from LeBow College of Business, Drexel University

Abstract: We study the links between fiscal stimulus packages during times of crisis and households' access to consumer credit. We do so by using household-level data on income and liabilities from the Consumer Expenditure Survey and estimating an empirical model along those in the literature on the consumption effects of these packages. We find that receiving a check from the government consistently translates into a reduction in both outstanding liabilities and the household's share of aggregate credit. This effect is present for each credit type as well as for the total, and it is robust to controlling for income levels and demographic characteristics correlated with consumers' access to credit.

Keywords: stimulus packages; consumer credit; borrowing and liquidity constraints (search for similar items in EconPapers)
JEL-codes: D12 E21 E62 H24 H31 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021-01-10
New Economics Papers: this item is included in nep-cwa and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:ris:drxlwp:2021_005

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