Martin Hodula, Simona Malovaná, Jan Frait
We focus on the link between the macroeconomic conditions faced by households, the confidence of households as investors and consumers, and households’ demand for credit. On a sample of 21 OECD countries, we provide empirical evidence that links households’ macroeconomic conditions to the evolution of credit. Specifically, we find that: (i) the well-known procyclicality of credit is reinforced in periods of favorable macroeconomic conditions; (ii) the relationship in question grows stronger when good macro conditions are met with optimistic consumer confidence; (iii) household credit is sticky on the way down, while it goes hand in hand with the improving economy during an economic upturn.
JEL codes: F12, F41, F43
Keywords: Credit, households, macroeconomic conditions, panel data
Issued: December 2019
Download: CNB WP No. 11/2019 (pdf, 359 kB), Estimation code and data (zip, 586 kB)