NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Household Leveraging and Deleveraging

Alejandro Justiniano, Giorgio E. Primiceri, Andrea Tambalotti

NBER Working Paper No. 18941
Issued in April 2013
NBER Program(s):   EFG   ME

U.S. households' debt skyrocketed between 2000 and 2007, and has been falling since. This leveraging (and deleveraging) cycle cannot be accounted for by the liberalization, and subsequent tightening, of credit standards in mortgage markets observed during the same period. We base this conclusion on a quantitative dynamic general equilibrium model calibrated using macroeconomic aggregates and microeconomic data from the Survey of Consumer Finances. From the perspective of the model, the credit cycle is more likely due to factors that impacted house prices more directly, thus affecting the availability of credit through a collateral channel. In either case, the macroeconomic consequences of leveraging and deleveraging are relatively minor, because the responses of borrowers and lenders roughly wash out in the aggregate.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Acknowledgments and Disclosures

Machine-readable bibliographic record - MARC, RIS, BibTeX

Users who downloaded this paper also downloaded these:
Bruno and Shin w18942 Capital Flows and the Risk-Taking Channel of Monetary Policy
Horioka, Nomoto, and Terada-Hagiwara w19596 Why Has Japan's Massive Government Debt Not Wreaked Havoc (Yet)?
Charles, Hurst, and Notowidigdo w18949 Manufacturing Decline, Housing Booms, and Non-Employment
Cochrane w18944 Finance: Function Matters, not Size.
Cihak, Demirguc-Kunt, Feyen, and Levine w18946 Financial Development in 205 Economies, 1960 to 2010
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us