Monetary Policy and Credit Card Spending

Francesco Grigoli () and Damiano Sandri

No 17751, CEPR Discussion Papers from Centre for Economic Policy Research

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: Monetary; policy (search for similar items in EconPapers)
JEL-codes: E21 E52 (search for similar items in EconPapers)
Date: 2022-12
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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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