CORDIS Project
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This project examines how credit supply shocks affect households' ability to cope with unexpected income changes. It analyzes consumption, savings, and behavioral responses to understand the welfare implications of imperfect credit markets.
The project The Credit Safety Net and the Costs of Credit Supply Shocks (CSCS) examines the effects of lender-imposed credit supply dynamics on households ability to weather idiosyncratic income shocks that are unrelated to the business cycle.
It relies on longitudinal household surveys and leverages unexpected and exogenous health shocks to identify individual-specific, random variations in exposure to credit supply shocks.
Beyond the foregone satisfaction of current consumption, CSCS emphasize…
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