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Monetary policy and credit card spending

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  • Grigoli, Francesco
  • Sandri, Damiano

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.

Suggested Citation

  • Grigoli, Francesco & Sandri, Damiano, 2026. "Monetary policy and credit card spending," European Economic Review, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:eecrev:v:185:y:2026:i:c:s0014292126000383
    DOI: 10.1016/j.euroecorev.2026.105294
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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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