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What Do Stimulus Packages Mean For Consumer Credit Markets?

Author

Listed:
  • Olivero, Maria

    (Drexel University and Swarthmore College)

  • Dvalishvili, Mikheil

    (The Graduate Center)

Abstract

We study the links between fiscal stimulus packages during times of crisis and households' access to consumer credit. We do so by using household-level data on income and liabilities from the Consumer Expenditure Survey and estimating an empirical model along those in the literature on the consumption effects of these packages. We find that receiving a check from the government consistently translates into a reduction in both outstanding liabilities and the household's share of aggregate credit. This effect is present for each credit type as well as for the total, and it is robust to controlling for income levels and demographic characteristics correlated with consumers' access to credit.

Suggested Citation

  • Olivero, Maria & Dvalishvili, Mikheil, 2021. "What Do Stimulus Packages Mean For Consumer Credit Markets?," School of Economics Working Paper Series 2021-5, LeBow College of Business, Drexel University.
    • Handle: RePEc:ris:drxlwp:2021_005
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    More about this item

    Keywords

    stimulus packages; consumer credit; borrowing and liquidity constraints;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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