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Responses to an anticipated increase in cash on hand: Evidence from term loan repayments

d’Astous, Philippe

Journal of Banking & Finance, 2019, vol. 108, issue C

Abstract: I use account-level credit card and term loan data to analyze consumers’ responses to anticipated increases in cash on hand following term loan run-offs. Financial constraints are elicited using past credit card payment behavior and can explain the response of credit card but not term loan expenditure: unconstrained consumers are 23% more likely to finance new durable goods with term loans after the run-off. The results provide evidence of consumers engaging in sequential term loan borrowing.

JEL-codes: D12 D14 E21 G21 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.jbankfin.2019.105649

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