Money has meaning that shapes its uses and social significance, including the monies low-income families draw on for survival: wages, welfare, and the Earned Income Tax Credit (EITC). This study, ...based on in-depth interviews with 115 low-wage EITC recipients, reveals the EITC is an unusual type of government transfer. Recipients of the EITC say they value the debt relief this government benefit brings. However, they also perceive it as a just reward for work, which legitimizes a temporary increase in consumption. Furthermore, unlike other means-tested government transfers, the credit is seen as a springboard for upward mobility. Thus, by conferring dignity and spurring dreams, the EITC enhances feelings of citizenship and social inclusion.
The temporary 2021 expansion of the Child Tax Credit (CTC) was intended to reduce child poverty during the COVID-19 pandemic. The expansion’s elimination of an existing phase-in with earnings, ...however, potentially disincentivized labor supply, raising concerns that it would reduce parent employment. We empirically test for employment effects using difference-in-differences analyses with Current Population Survey data. Across many specifications and multiple sub-groups, we find very small, inconsistently signed, statistically insignificant impacts of the 2021 CTC on parental labor force participation and employment.
•The 2021 expansion of the Child Tax Credit was intended to reduce child poverty.•The expansion, however, potentially disincentivized labor supply.•We empirically test for employment effects using Current Population Survey data.•We find inconsistently signed and insignificant impacts on parental employment.
With the rapid growth of the credit card business in China's energy industry, credit risk is gradually revealed. This study aims to scientifically measure the credit risk of credit cards used in ...China's energy industry and to lay the foundation for comprehensive credit risk management. Based on an analysis of the factors influencing credit risk influencing factors, this study applies the random forest algorithm and the monthly data of credit cards used by energy industry customers in a branch of the Postal Savings Bank of China from April 2014 to June 2017 to build an effective credit risk assessment model and scientifically measure the credit risk in China's energy industry. The results suggest that credit card features like the overdraft ratio and the amount of credit card expenses within a month have significant impacts on credit risk, our model's comprehensive prediction accuracy is as high as 91.5%, and its stability is satisfying. These findings can provide valuable information to help banks improve their credit risk management.
•This study aims to measure the risk of credit cards used in energy industry.•We lay the foundation for comprehensive credit risk management.•Random forest algorithm and the monthly data of credit cards are applied.•Banks should focus more on key features such as the overdraft ratio.
Credit operations are fundamental in the banks’ activities and provide a significant share of their income. Under an increased demand for credit resources, credit risks are growth. It keeps the ...importance of the problem of an increase in the efficiency of lending management processes in financial institutions. The aim of the work is the justification and development of new technology and models for the management of bank lending that reduce credit risks and increases lending efficiency. The research materials are statistical data from the Bank of Russia and Rosstat. The methods of system analysis, methods of control theory, methods of statistics, optimization methods and machine learning are used. The positive results of the implementation of the proposed technology and credit management models are of practical importance to ensure the profitability growth of credit organization and contribute to its competitiveness.
This work studies the relations between income distribution and monetary/fiscal policies using an credit-augmented version of the agent-based Keynesian model in Dosi et al. (2010). We model a banking ...sector and a monetary authority setting interest rates and credit lending conditions in a framework combining Keynesian mechanisms of demand generation, a Schumpeterian innovation-fueled process of growth and Minskian credit dynamics. We show that the model is able to account for a rich ensemble of empirical features underlying current and past recessions, including the impact of financial factors on the real economy, and the role in that of income distribution. We find that more unequal economies are exposed to more severe business cycles fluctuations, higher unemployment rates, and higher probability of crises. From a policy perspective, the model suggests that fiscal policies dampen business cycles, reduce unemployment and the likelihood of experiencing a huge crisis and, in some circumstances, also affect long-term growth. Furthermore, the more income distribution is skewed toward profits, the greater the effects of fiscal policies. Interest rates have instead a strong non-linear effect on macroeconomic dynamics. Tuning the interest rate when it is below a given threshold has no detectable effects. Conversely, increasing the interest rate when it is above that threshold yields lower and more volatile output growth, higher unemployment rates, and higher likelihood of crises.
We evaluate the impact of the Federal Reserve corporate credit facilities (PMCCF and SMCCF) on corporate bond markets. Conditions in primary markets improve once the facilities are announced, ...particularly for issuers that need to refinance before 2022. Issuance accelerates before spreads normalize. The secondary market points to a causal role for the facilities, with a differential impact on eligible issues and a significant effect of direct bond purchases, but less so for purchases through ETFs. We find evidence that dealers link the primary and secondary market recovery, with facilities affecting dealer willing to underwrite issuances and intermediate in secondary markets.
This paper examines the impact of bank ownership on credit growth in developing countries before and during the 2008–2009 crisis. Using bank-level data for countries in Eastern Europe and Latin ...America, we analyze the growth of banks’ total gross loans as well as the growth of corporate, consumer, and residential mortgage loans. While domestic private banks in Eastern Europe and Latin America contracted their loan growth rates during the crisis, there are notable differences in foreign and government-owned bank credit growth across regions. In Eastern Europe, foreign bank total lending fell by more than domestic private bank credit. These results are primarily driven by reductions in corporate loans. Furthermore, government-owned banks in Eastern Europe did not act counter-cyclically. The opposite is true in Latin America, where the growth of government-owned banks’ corporate and consumer loans during the crisis exceeded that of domestic and foreign banks. Contrary to the case of foreign banks in Eastern Europe, those in Latin America did not fuel loan growth prior to the crisis. Also, there are less pronounced and robust differences in the behavior of foreign and domestic banks during the crisis in Latin America.
Effective and thorough credit-risk management is a key factor for lending institutions, as significant financial losses can arise from the borrowers’ default. Consequently, machine learning methods ...can measure and analyze credit risk objectively when at the same time they face increasingly attention. This study analyzes default payment data from a credit cards’ portfolio containing some 30,000 clients from Taiwan with twenty-three attributes and with no missing information. We compare prediction accuracy of seven classification methods used, i.e. KNN, Logistic Regression, Naïve Bayes, Decision Trees, Random Forest, SVC, and Linear SVC. The results indicate that only few out of most of the typical variables used can adequately analyze default characteristics in terms of lending decisions. The results provide effective feedback to credit evaluators, lending institutions and business analysts for in-depth analysis. Also, they mention to the importance of the precautionary borrowing techniques to be used to better understand credit-card borrowers’ behavior, along with specific accounting, historical and demographical characteristics.
This paper analyzes the differential effects of household and business credit dynamics on business cycles in emerging market economies. We first provide evidence that existing results relating credit ...expansions to economic expansions, real exchange rate appreciations and trade deficits hold more strongly for household credit than business credit. Then, using a two-sector real business cycle model of a small open economy, we study the model dynamics generated by shocks to household credit and business credit, the latter further divided into credit to tradable and nontradable sectors. The results show that the three types of credit shocks generate different dynamics in sectoral input and output levels as well as the real exchange rate. The model successfully generates the comovement between the cycle and different credit types, matching the strong positive correlation of household credit with output and real exchange rate, and the negative correlation with net exports. Our results underline the importance of distinguishing between household and business credit in studying credit dynamics.
STATUS GOODS Bursztyn, Leonardo; Ferman, Bruno; Fiorin, Stefano ...
The Quarterly journal of economics,
08/2018, Letnik:
133, Številka:
3
Journal Article
Recenzirano
Odprti dostop
This article provides field-experimental evidence on status goods. We work with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, we show that ...demand for the platinum card exceeds demand for a nondescript control product with identical benefits, suggesting demand for the pure status aspect of the card. Transaction data reveal that platinum cards are more likely to be used in social contexts, implying social image motivations. In a second experiment, we provide evidence of positional externalities from the consumption of these status goods. A final experiment provides suggestive evidence that increasing self-esteem causally reduces demand for status goods, indicating that social image might be a substitute for self-image.
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