Perspectives on recent trends in consumer debt
The causes and ramifications of the rise in the consumer debt burden over time have been subject to much debate. This paper first offers a brief overview and analysis of the key economic variables used to evaluate consumer debt levels. The principal focus of the paper, however, is a broad review of the literature on the topic of consumer debt to provide a framework for how to assess recent credit trends. In addition, three explanations for credit growth — the democratization of credit, increased convenience use of credit, and increased homeownership — are evaluated in terms of their contribution to overall credit growth. This paper concludes that while these three trends have all played some part in increasing credit outstanding, there are clearly other significant factors contributing to the increase in consumer debt over time.
|Date of creation:||2006|
|Date of revision:|
|Publication status:||Published in Consumer Interests Annual (2006)|
|Contact details of provider:|| Postal: 10 Independence Mall, Philadelphia, PA 19106-1574|
Web page: http://www.philadelphiafed.org/
More information through EDIRC
|Order Information:|| Web: http://www.phil.frb.org/publicaffairs/pubs/index.html Email: |
References listed on IDEAS
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.:
- Donald Cox & Tullio Japelli, 1993.
"The Effect Of Borrowing Constraints On Consumer Liabilities,"
Boston College Working Papers in Economics
228, Boston College Department of Economics.
- Cox, Donald & Jappelli, Tullio, 1993. "The Effect of Borrowing Constraints on Consumer Liabilities," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 197-213, May.
- Dean M. Maki, 2000. "The growth of consumer credit and the household debt service burden," Finance and Economics Discussion Series 2000-12, Board of Governors of the Federal Reserve System (U.S.).
- Elizabeth Schmitt, 2000. "Does rising consumer debt signal future recessions?: Testing the causal relationship between consumer debt and the economy," Atlantic Economic Journal, International Atlantic Economic Society, vol. 28(3), pages 333-345, September.
- David B. Gross & Nicholas S. Souleles, 2001.
"An Empirical Analysis of Personal Bankruptcy and Delinquency,"
NBER Working Papers
8409, National Bureau of Economic Research, Inc.
- David B. Gross, 2002. "An Empirical Analysis of Personal Bankruptcy and Delinquency," Review of Financial Studies, Society for Financial Studies, vol. 15(1), pages 319-347, March.
- David B. Gross & Nicholas S. Souleles, 1999. "An Empirical Analysis of Personal Bankruptcy and Delinquency," Center for Financial Institutions Working Papers 98-28, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Kathleen W. Johnson, 2004. "Convenience or necessity? understanding the recent rise in credit card debt," Finance and Economics Discussion Series 2004-47, Board of Governors of the Federal Reserve System (U.S.).
- Leonard I. Nakamura & Tom Stark, 2005. "Benchmark revisions and the U.S. personal saving rate," Working Papers 05-6, Federal Reserve Bank of Philadelphia.
- Wenli Li, 2005. "Moving up: trends in homeownership and mortgage indebtedness," Business Review, Federal Reserve Bank of Philadelphia, issue Q1, pages 26-34.
- Karen E. Dynan & Kathleen W. Johnson & Karen M. Pence, 2003. "Recent changes to a measure of U.S. household debt service," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 417-426.
- Ellis W. Tallman, 2001. "The burden of debt," EconSouth, Federal Reserve Bank of Atlanta, issue Q2, pages 1.
- Margaret M. McConnell & Richard Peach & Alex Al-Haschimi, 2003. "After the refinancing boom: will consumers scale back their spending?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Dec).
- Jonathan McCarthy & Richard Peach, 2004. "Are home prices the next "bubble"?," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-17.
- Todd Sinai & Nicholas S. Souleles, 2005. "Owner-Occupied Housing as a Hedge Against Rent Risk," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 763-789.
- Mark Furletti, 2003. "Credit card pricing developments and their disclosure," Payment Cards Center Discussion Paper 03-02, Federal Reserve Bank of Philadelphia.
- Robert G. Murphy, 1997. "Household Debt and Aggregate Consumption Expenditures," Boston College Working Papers in Economics 386, Boston College Department of Economics.
- Sebastian Barnes & Garry Young, 2003. "The rise in US household debt: assessing its causes and sustainability," Bank of England working papers 206, Bank of England.
- David B. Gross & Nicholas S. Souleles, 2002. "Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 149-185.
- John V. Duca, 2004. "How vulnerable are housing prices?," Southwest Economy, Federal Reserve Bank of Dallas, issue Mar, pages 1, 11-16.
- Todd Sinai & Nicholas S. Souleles, 2003.
"Owner-Occupied Housing as a Hedge Against Rent Risk,"
NBER Working Papers
9462, National Bureau of Economic Research, Inc.
- Todd Sinai & Nicholas S. Souleles, 2005. "Owner-occupied housing as a hedge against rent risk," Working Papers 05-10, Federal Reserve Bank of Philadelphia.
- Kartik B. Athreya, 2004. "Shame as it ever was : stigma and personal bankruptcy," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 1-19.
When requesting a correction, please mention this item's handle: RePEc:fip:fedpdp:06-05. 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: (Beth Paul)
If references are entirely missing, you can add them using this form.