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Consumers and the economy, part I: Household credit and personal saving

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  • Reuven Glick
  • Kevin J. Lansing

Abstract

In the years since the bursting of the housing bubble, the personal saving rate has trended up from around 1% to around 6%, while the ratio of household debt to disposable income has dropped from 130% to 118%. Changes over time in the availability of credit to households can explain 90% of the variance of the saving rate since the mid-1960s, including the recent uptrend, according to a simple empirical model.

Suggested Citation

  • Reuven Glick & Kevin J. Lansing, 2011. "Consumers and the economy, part I: Household credit and personal saving," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jan10.
    • Handle: RePEc:fip:fedfel:y:2011:i:jan10:n:2011-01
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    References listed on IDEAS

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    1. Reuven Glick & Kevin J. Lansing, 2009. "U.S. household deleveraging and future consumption growth," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue may15.
    2. Bacchetta, Philippe & Gerlach, Stefan, 1997. "Consumption and credit constraints: International evidence," Journal of Monetary Economics, Elsevier, vol. 40(2), pages 207-238, October.
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    Cited by:

    1. Kevin J. Lansing, 2011. "Gauging the impact of the Great Recession," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue july11.

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