Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data

By David B. Gross, Nicholas S. Souleles. 2002

954 citations recorded by the source corpus.

How researchers see this paper

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Monetary Policy Pass-Through: Household Consumption and Voluntary Deleveraging (2014, background): “Consistent with this view, Gross and Souleles (2002) show that consumers whose credit card limits get increased rise their debt, with the effect being larger for consumers near their current limit, which is consistent with binding liquidity constraints.”
Do Consumers Choose the Right Credit Contracts (2015, methodology): “This paragraph draws heavily on Gross and Souleles (2002).”
Entrepreneurial finance, credit cards, and race☆ (2012, background): “: Gross and Souleles, 2002). Other examples of alternative lending sources include Morse (2011), which finds that access to payday loans helps”
Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy (2010, positive): “Gross and Souleles (2002) were the first to point out that many households who borrow at high interest on credit cards have non-negligible investments in low-yield liquid assets.”
A Model of Money and Credit, with Application to the Credit Card Debt Puzzle (2007, neutral): “W 2m(m2, b2) = β2W3m(m N 3 , b N 3 ) (10) W 2b (m2, b2) = β2(1 + r2)W3b(m N 3 , b N 3 ).”
Contract Design and Self-Control: Theory and Evidence (2004, background): “The average credit card debt amounts to over $5,000 per US household (Gross and Souleles, 2002; Laibson, Repetto, and Tobacman, forthcoming).”