Determinants of credit to households: An approach using the life-cycle model

Michał Rubaszek and Dobromił Serwa ()

Economic Systems, 2014, vol. 38, issue 4, 572-587

Abstract: This paper applies a life-cycle model with individual income uncertainty in order to investigate the determinants of credit to households. We show that the household credit to GDP ratio depends on the lending-deposit interest rate spread, individual income uncertainty, and individual income persistence. We subsequently provide empirical evidence for the prediction of a theoretical model on the basis of data from OECD and EU countries.

Keywords: Household credit; Life-cycle economies; Banking sector (search for similar items in EconPapers)
JEL-codes: E21 E43 E51 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:38:y:2014:i:4:p:572-587

DOI: 10.1016/j.ecosys.2014.05.004

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