Too much of a good thing? Households’ macroeconomic conditions and credit dynamics
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F04274644%3A_____%2F22%3A%230000881" target="_blank" >RIV/04274644:_____/22:#0000881 - isvavai.cz</a>
Alternative codes found
RIV/61989100:27510/22:10249822
Result on the web
<a href="https://doi.org/10.1515/ger-2021-0033" target="_blank" >https://doi.org/10.1515/ger-2021-0033</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1515/ger-2021-0033" target="_blank" >10.1515/ger-2021-0033</a>
Alternative languages
Result language
angličtina
Original language name
Too much of a good thing? Households’ macroeconomic conditions and credit dynamics
Original language description
Favorable macroeconomic conditions, accompanied by optimistic consumer confidence, can stimulate and shape households’ expectations in such a way that they gradually extrapolate the view of good times lasting “forever”. As a consequence, households can then be inclined to accept a much higher level of indebtedness – higher than they would be willing to take on if they were to correctly perceive a discontinuation of the positive trend in the future. This paper documents the empirical link between the macroeconomic conditions faced by households, the confidence of households as investors and consumers, and households’ demand for credit on a sample of 21 European countries. The well-known procyclicality of household credit is found to grow stronger when favorable macroeconomic conditions are met with optimistic consumer confidence. While household credit goes hand in hand with the improving economy during an economic upturn, it is found to be sticky on the way down. Estimates show that households tend to extrapolate recent and current macroeconomic trends to the future and over-estimate the persistence of favorable or adverse conditions.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50206 - Finance
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2022
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
German Economic Review
ISSN
1465-6485
e-ISSN
1468-0475
Volume of the periodical
23
Issue of the periodical within the volume
4
Country of publishing house
DE - GERMANY
Number of pages
38
Pages from-to
529-566
UT code for WoS article
000757225800001
EID of the result in the Scopus database
2-s2.0-85126038220