This paper explores a rational economic explanation for the much discussed credit card debt puzzle. We set-up and simulate a generalization of the buffer-stock consumption model with longterm revolving debt contracts. In line with US credit card law, lenders can always deny households access to...

We investigate a non-parametric method to estimating marginal propensities to consume (MPC) using regression splines. This approach complements existing methods by relaxing a number of strong requirements on the part of the theory, otherwise necessary to acquire identification. Specifically, we...

I papiret undersøges anvendeligheden af en ikke-parametrisk metode, en såkaldt regression spline, til estimation af husholdningers marginale forbrugstilbøjelighed. I forhold til eksisterende metoder kræver denne tilgang færre teoretiske antagelser for identifikation. Mere specifikt vises...

To analyze the effectiveness of stabilization policies which includes effects on households future income it is central to account for anticipation effects on consumption. We investigate this using high-frequency spending and balance sheet data from a major Danish bank. We examine the behavior...

We study whether households can distinguish persistent from transitory income shocks, and the implications for consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component of its income process from actual income realizations...

We study whether households can distinguish persistent from transitory income shocks, and the implications for consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component of its income process from actual income realizations...

To analyze the effectiveness of stabilization policies which includes effects on households future income it is central to account for anticipation effects on consumption. We investigate this using high-frequency spending and balance sheet data from a major Danish bank. We examine the behavior...