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Equities and inequality

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  • Alessandra Bonfiglioli

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

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Cited by:
  1. Bittencourt, Manoel, 2007. "Inflation and Financial Development: Evidence from Brazil," Proceedings of the German Development Economics Conference, Göttingen 2007 1, Verein für Socialpolitik, Research Committee Development Economics.
  2. Manoel Bittencourt, 2007. "Financial Development and Inequality: Brazil 1985-1994," Ibero America Institute for Econ. Research (IAI) Discussion Papers 164, Ibero-America Institute for Economic Research.
  3. Alimi, R. Santos, 2014. "Inflation and Financial Sector Performance: The Case Of Nigeria," MPRA Paper 57180, University Library of Munich, Germany.
  4. Giuseppe Bertola, 2007. "Finance and Welfare States in Globalising Markets," RBA Annual Conference Volume, Reserve Bank of Australia, in: Christopher Kent & Jeremy Lawson (ed.), The Structure and Resilience of the Financial System Reserve Bank of Australia.
  5. Abu N. M., Wahid & Muhammad, Shahbaz & Pervez, Azeem, 2011. "Inflation and financial sector correlation: the case of Bangladesh," MPRA Paper 32935, University Library of Munich, Germany, revised 20 Aug 2011.
  6. Muhammad, Shahbaz & Tiwari, Aviral & Reza, Sherafatian-Jahromi, 2012. "Financial Development and Income Inequality: Is there any Financial Kuznets curve in Iran?," MPRA Paper 40899, University Library of Munich, Germany, revised 26 Aug 2012.

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