Household Borrowing During a Creditless Recovery

We investigate the factors behind the borrowing of households during a creditless recovery. We use data from a typical creditless recovery case-Estonia during the aftermath of the global financial crisis. Cross-sectional data on households' assets, liabilities, income, expectations, and intenti...

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Bibliographic Details
Published inEmerging markets finance & trade Vol. 51; no. 5; pp. 1051 - 1068
Main Author Meriküll, Jaanika
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 03.09.2015
Taylor & Francis, Ltd
Taylor & Francis Ltd
Subjects
Borrowing
business cycle
Consumer credit
Credit control
creditless recovery
Economic crisis
Economic recovery
household borrowing
Households
micro evidence
Oaxaca-Blinder decomposition
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Studies
Estonia
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Summary:We investigate the factors behind the borrowing of households during a creditless recovery. We use data from a typical creditless recovery case-Estonia during the aftermath of the global financial crisis. Cross-sectional data on households' assets, liabilities, income, expectations, and intention to use credit in 2001-10 and 2012 are employed. The results indicate that two-thirds of the sluggish recovery in credit demand can be explained by changes in household endowments such as income reduction and lower income expectations, while one-third remains unexplained and is ascribed to changes in behavioral relations. It is noted that the share of credit-constrained households was very high during the creditless recovery period.
ISSN:1540-496X
1558-0938
DOI:10.1080/1540496X.2015.1048154