Consumption and Credit: A model of time-varying liquidity Constraints Export

@article{1999_Ludvigson, abstract = {This paper studies the optimal consumption behavior of individuals who face borrowing limitations that vary stochastically with their income. This framework is motivated by new empirical evidence that I document in U.S. aggregate data: predictable growth in consumer credit is significantly related to consumption growth, a finding that is inconsistent with existing models of consumer behavior. The time-varying liquidity constraint model considered here correctly predicts two key properties of the U.S. aggregate data: the correlation of consumption growth with predictable credit growth documented in this paper, and the well-known correlation between consumption growth and predictable income growth that has been documented extensively elsewhere.}, author = {Ludvigson, S.}, citeulike-article-id = {651823}, citeulike-linkout-0 = {http://links.jstor.org/sici?sici=0034-6535%28199908%2981%3A3%3C434%3ACACAMO%3E2.0.CO%3B2-%23}, journal = {Review of Economics and Statistics}, keywords = {behaviour, consumer, consumption, credit}, number = {3}, pages = {434--447}, posted-at = {2006-05-18 18:26:17}, priority = {0}, title = {Consumption and Credit: A model of time-varying liquidity Constraints}, url = {http://links.jstor.org/sici?sici=0034-6535%28199908%2981%3A3%3C434%3ACACAMO%3E2.0.CO%3B2-%23}, volume = {81}, year = {1999} }

TY - JOUR ID - 1999_Ludvigson L3 - citeulike-article-id:651823 N2 - This paper studies the optimal consumption behavior of individuals who face borrowing limitations that vary stochastically with their income. This framework is motivated by new empirical evidence that I document in U.S. aggregate data: predictable growth in consumer credit is significantly related to consumption growth, a finding that is inconsistent with existing models of consumer behavior. The time-varying liquidity constraint model considered here correctly predicts two key properties of the U.S. aggregate data: the correlation of consumption growth with predictable credit growth documented in this paper, and the well-known correlation between consumption growth and predictable income growth that has been documented extensively elsewhere. IS - 3 JF - Review of Economics and Statistics EP - 447 TI - Consumption and Credit: A model of time-varying liquidity Constraints VL - 81 SP - 434 KW - behaviour KW - consumer KW - consumption KW - credit AU - Ludvigson, S PY - 1999/// UR - http://links.jstor.org/sici?sici=0034-6535%28199908%2981%3A3%3C434%3ACACAMO%3E2.0.CO%3B2-%23 ER -