Laibson, David; Tobacman, Jeremy; Repetto, Andrea - National Bureau of Economic Research (NBER) - 2000
attempt to reconcile the high rate of credit card borrowing with observed levels of life cycle wealth accumulation. We … simulate a lifecycle model with five properties that create demand for credit card borrowing. First, the calibrated labor … may declare bankruptcy, reducing the effective cost of credit card borrowing. Fifth, households have relatively more …