Credit Shocks and Equilibrium Dynamics in Consumer Durable Goods Markets

• 成果类型: Article
• 署名作者: Gavazza, Alessandro; Lanteri, Andrea
• 署名单位: University of London; London School Economics & Political Science; Duke University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdab004
• 发表日期: 2021
• 页码: 2935-2969
• 关键词: stationary equilibrium; machine replacement; business-cycle; housing-market; RISK; adjustment; MODEL

摘要

This article studies equilibrium dynamics in consumer durable goods markets after aggregate credit shocks. We introduce two novel features into a general-equilibrium model of durable consumption with heterogeneous households facing idiosyncratic income risk and borrowing constraints: (1) indivisible durable goods are vertically differentiated in their quality and (2) trade on secondary markets at market-clearing prices, with households endogenously choosing when to trade or scrap their durables. The model highlights a new transmission mechanism for macroeconomic shocks and successfully matches several empirical patterns that we document using data on U.S. car markets around the Great Recession. After a tightening of the borrowing limit, debt-constrained households postpone the decision to scrap and upgrade their low-quality cars, which depresses mid-quality car prices. In turn, this effect reduces wealthy households' incentives to replace their mid-quality cars with high-quality ones, thereby decreasing new-car sales. We further use our framework to evaluate targeted fiscal stimulus policies such as the Car Allowance Rebate System in 2009 (Cash for Clunkers).