Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25462 
Year of Publication: 
2005
Series/Report no.: 
CFS Working Paper No. 2005/26
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an 'accountant-shopper' framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework can actually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers.
Subjects: 
Credit Cards
Debt
Self Control
Household Portfolios
JEL: 
E21
G11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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