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Equities and Inequality

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Author Info
Alessandra Bonfiglioli

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Abstract

Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an 'accountant-shopper'framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework can actually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers.

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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 947.

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Date of creation: Sep 2005
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Handle: RePEc:upf:upfgen:947

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Related research
Keywords: Income inequality; financial development; capital market frictions; investor protection; instrumental variables; dynamic panel data;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
G30 - Financial Economics - - Corporate Finance and Governance - - - General
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bittencourt, Manoel, 2008. "Inflation and Financial Development: Evidence from Brazil," Working Papers RP2008/14, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
    Other versions:
  2. Bertola, Giuseppe, 2007. "Finance and Welfare States in Globalizing Markets," CEPR Discussion Papers 6480, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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