Consumption smoothing or consumption binging? The effects of government-led consumer credit expansion in Brazil

• 成果类型: Article
• 署名作者: Garber, Gabriel; Mian, Atif; Ponticelli, Jacopo; Sufi, Amir
• 署名单位: Central Bank of Brazil; Princeton University; Northwestern University; University of Chicago; National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103834
• 发表日期: 2024
• 关键词: Credit booms; Payroll loans; Credit card expenditure

摘要

Brazil initiated a major credit expansion program through government banks in 2011. The program primarily targeted public sector workers with offers of payroll -backed loans. Using individual -level administrative data we find that the program led to a 15 percentage point rise in debt to initial income for public sector workers. We develop a new method for estimating workers' expected income growth, and show that consumption smoothing cannot explain the rise in consumer borrowing. Instead, the evidence supports consumption binging: less financially sophisticated workers borrowed more at high real interest rates, and experienced both higher consumption volatility and lower average consumption.