IDEAS home Printed from https://ideas.repec.org/a/fau/fauart/v54y2004i11-12p520-540.html
   My bibliography  Save this article

Credit and Household Consumption

Author

Listed:
  • Renata Pašalièová
  • Vladimír Stiller

Abstract

The paper emphasizes how changes in credit conditions in the Czech Republic are likely to influence aggregate consumption. Aggregate consumption plays an important role in macroeconomic fluctuations and in the transmission mechanism. Czech household debt has increased in the past five years. The empirical analysis presented in the paper is based on the Life Cycle/Permanent-Income Hypothesis, including a standard model of consumption and incorporating credit supply. We first concluded that credit conditions have a significant impact on household consumption, and that consumption is acutely sensitive to disposable income. Our models further confirmed the acute effect real interest rates have on household consumption. We ultimately concluded that inflation level, growth of real disposable income, and low interest rates support household credit growth.

Suggested Citation

  • Renata Pašalièová & Vladimír Stiller, 2004. "Credit and Household Consumption," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 54(11-12), pages 520-540, November.
  • Handle: RePEc:fau:fauart:v:54:y:2004:i:11-12:p:520-540
    as

    Download full text from publisher

    File URL: http://journal.fsv.cuni.cz/storage/995_03_520-540.pdf
    Download Restriction: no

    More about this item

    Keywords

    credit; consumption; household; interest rate; interest-rate spread;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:54:y:2004:i:11-12:p:520-540. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova). General contact details of provider: http://edirc.repec.org/data/icunicz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.