Debt and financial expectations: an individual and household level analysis
In this paper we show that optimistic financial expectations impact positively on both the uantity of debt and the growth in debt, at the individual and household levels. Our heoretical model shows that this association is predicted under a variety of plausible cenarios. In the empirical analysis we explore the determinants of debt and of growth in ebt using British data. We find convincing support for our theoretical priors and show that t is optimistic financial expectations per se that are important in influencing debt, rather han the accuracy of individuals’ predictions regarding their future financial situation.
|Date of creation:||May 2003|
|Date of revision:||Feb 2004|
|Contact details of provider:|| Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK|
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Web page: http://www2.le.ac.uk/departments/economics
More information through EDIRC
|Order Information:|| Web: http://www2.le.ac.uk/departments/economics/research/discussion-papers Email: |
When requesting a correction, please mention this item's handle: RePEc:lec:leecon:03/5. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mrs. Alexandra Mazzuoccolo)
If references are entirely missing, you can add them using this form.