A RE-EXAMINATION OF t ONSUMER CREDIT GROWTH

David B. Eastwood and Cynth ia Ann Sencindiver*

Consumer installment credit has grown rapidly since 1945, raising concerns about consumers becoming overextended. A model of credit growth which provides a long-run perspective is examined. This model generates a limiting debt­to-income ratio that is approached asymptoti­cally. Actual debt-to-income ratios appear to conform with this theory, particular ly when an allowance is made for the changing age distri­bution of the population.

Consumer installment debt has grown dramatically since World War II.I Outstanding debt in 1945 was $2.462 billion, and it had risen to $396.082 billion in 1983. The average annual rate of increase in debt outstanding f or this period was 14. 31 percent . Not only has the level of con­sumer installment debt grown rapi dly, but it has grown at approximatel y twice the rate of either personal income or disposable i ncome.2 Personal income increased at an average annual rate of 7. 59 percent, and disposab l e i ncome at 7 . 49 per­cent . Most of the credi t growth has been attri­buted t o factors such as l end i ng i nstitutions becomi ng more effective in inducing consumers to borrow , consumers t h emsel ves experienc ing changes i n preferences toward cons umption today, t h e emergence of credit car ds, new consumer durables, and ch anges in credit terms .

Dat a , such as t hat presented above, have fre­quently led researchers a nd the popular press to express a l arm regarding whether consumers are becoming de bt-ridden . Their concerns can be grouped into four areas . One is the ability of consumers to repay exis t ing loans. As t he debt­t o-income rat i o rises, consumers would have more difficul t y in meet i ng the repayments schedul es, un less t h ere is a comparable r i se in i ncome. Anoth er c l ose l y re l a t ed concern i s the effect of

*

1

David B. Eastwood i s an Assoc iate Professor, Departme nt of Agricul t ural Economics and Rural Sociology , Univer sit y of Tennessee, Knoxvil l e , and Cynthia Ann Senc indiver is a gradua t e s tudent, Depar t ment o f Home Manageme nt and Housing, Ohio Stat e Unive r s i t y.

Consumer installment credit i s cred i t extended to i ndiv iduals thr ough normal business channe l s schedul ed t o be repaid , or wi th the opt ion of r epayment , i n two or more installment s .

2 . b l . Disposa e income i s the equi val ent of s pe ndable i ncome, a nd persona l i ncome i s i ncome before taxes. The interpret at i on of t he difference i n growth r a t es i s t h at t axes h ave increased over the time period , causing dis posable income t o grow somewhat slower.

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the debt repayments on current consumption. Rising debt payments coul d lead to reduced current consuruption, and thereby depress demand for goods and services. Third is the potential impact of increased borrowing on saving within the economy. The use of credit allows consumers to avoid the need to save to acquire the money to make a purchase in the marketplace, and the re­payments usually t ake the place of subs equent saving. Consequently, the economy could exper­ience lower saving, investment, and growth . Fourth , concern has been expressed regarding the impact of consumer credit on economic cycles. That is, the use of credit could be a cause of fluctuations in economic activity.

The objective of this paper is to re-examine post-World War II credit growth in order to gain a long-run perspective on whether consumers are becoming over burdened with debt , The analysis is based upon a model of consumer installment credit growth originally developed in the 1950s and it is extended in two meaningful ways . One' i s to use disposable income in place of pers onal income to generate a l i miting debt-to-income ratio. The other is to re-estimate the model including more recent data, so a longer time period is available to examine the re l ationships . Results of t he re-analysis shed very interesting light on each of the four areas of concern.

Background

Rapid credit growth fo llowing Wor l d War II has prompted a series of in-depth analyses of all aspects of consumer credit. A summary of these studies t hrough the earl y 1970s is found in [2). These studies conclude that although consumer debt i s rising, consumer s did not appear to have become over ext ended [3, 4, 5 , 7, 8, 9, 10, 14, 17 ) , Another conclusion is t hat consumer credit contributes to the fluctuat ions in business activity, but it is not a cause of t he turning po i nts [4, 12 , 14] .

More recent ana l yses o f consumer credit have focused on t he deb t pos i tions of househol ds a nd their re l a t ionsh i ps with bankr upt cies and devel opment s in cons umer credit markets. Curtin and Neubig [l ) indicate tha t househol ds expanded t heir use of credit cautious ly dur ing the 197 0s . Pal ash [13 ) examined all forms of household debt and found litt l e ch a nge i n delinquency and bank­ruptcy rat es. Harr is and Brad l ey [6 ] and Luckett [11] conc l ude t hat t he debt- t o- income ratio dur i ng the 1970s was not out of l i ne with the post World War I I experience . Shepard [16] uti l ­izing more recent data has conc l uded that h i gher debt-to-i ncome ratios have accounted for a pproxi­matel y one-half of the pos twar growth of bankruptcies .

A recurring theme in all of these analyses is th e importance of the life-cycle behavior of hous e­holds . Credit use and delinquency rat es vary with t he stage of the li fe-cycle, as shown in such analyses as the 1977 Survey of Consumer Finances, conducted by the University of Mich igan . Table 1 provides an indication of this effect by presenting data on t he distribution of

TABLE 1 . I nstallment Debt and Age of Family Head 1960 and 1977

Per cent with Installment Debt Age of Head 1960 1977

Under 25 54 60 25-34 63 64 35-44 59 61 45-54 51 52 55-64 31 38 65 and ol der 15 11

Source: Survey Research Center, University of Michigan , The 1977 Survey of Consumer Finances.

installment deb t by age of the head of the family in 1960 and 1977. In either year, the h ighest incid ence of borrowing occurred in famil i es having a head between 25 and 34 years of age . Subsequent age groups have progressively lower proportions. The table also i ndicat es that there may have been a very small increase in the i ncl i n ation to borrow, as in most age groups the 1977 proportions are s lightly l arger than in 1960, a conclus ion reached in [l].

Ent hoven (3) was the first to deve lop an explicit model of consumer credit growth us ing a l ife-cyc l e perspective. The model has been r e-evalu­a t ed by Evans [4 ] . In the fifteen years s ince the re-evaluation, studies of consumer credit growth have been inde pendent of the Enthoven model, and this is somewhat unfortunat e , as it could have provided a convenient analytical framework . In addit i on, the l onger time period pe rmit ted in t he subsequent analyses would have served as a better test of the model ' s long-run implications. The next sect ion of the paper outlines the key f eat ures of this mode l .

Enthoven' s Growth Mod e l

Consider the following hypothet i cal s ituation. All hous eholds borrowing during an initial year are young coupl es, having the same propensity to borrow. Assume that new debt arising in any year i s a proportion of that year's income and that income grows at a cons tant annual rat e. Those who are borrowers comprise a constant proportion of the population . For simplicity, as s ume all loans have the same l ength of contract, n. These conditions are consistent with equations 1 and 2, where Y denotes income, ND represents new debt, t is a time s ubscript, and r i s the annual rate of growth .

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(1) NDt = bYt

( 2) Yt = Y0 ( l+r) t

Repayments, R, r epresent reductions in debt outstanding, D, and new debt increases debt out­standing. Consequent l y, the change in debt out­standing during any year equals the difference between new borrowings a nd repayments.

(3)

Since repayments are the result of past borrow­ing, and past borrowi ng is a func t ion of income ( equation 1), then equation 3 may be rewritten in terms of i ncome.

Dt - Dt-1 = bYt - LbYt- 1 - •. • - LbYt-n

(4)

The interpretation of equation 4 is that changes in outstandings are proportional to an expression which grows at the same rate as income, or:

Suppose that dur ing the i ni t i a l year, o, there i s a relatively low level of existing debt. For example, at the end of the Second World War, consumer installment debt was usually l ow, due to the war effort. Adding an initial l evel of out­standing debt in light of equa tion 5 results in the level of outstanding debt in any year t being determined by the ini tial l evel of i ncome, the rate of i ncome growth, the proportion of income generat ing a change in debt, and the start ing l evel of debt . For t he first two years t h is is:

Di a(l +r)Y0 + D0

Dz a( l+r)2y0 + a(l+r)Y0 + D0

Or, in general: t

Dt = aY0 [ E ( l+r)i ] + D0 i=l

This i s a series which can be shown to have the fo llowing sum.

(6 ) Dt = a(l+r)y [(l+r)t- 1 ] + D r o o

Using (2) and (6), the debt- to- income ratio i s :

(7) (D/Y)t = a( l~r ) - [ a (l~r) - (D/ Y)oJ /(l+r)t

What h appens to the ratio in the l ong run? That is, as t becomes l arger and larger, wh at is the effect on the right-hand side? There is no effec t on the first term because t does not appear. However, the second term approaches zero, because the denominator becomes larger and larger. The l imit i ng debt-to-income ratio is:

a( l+r) (8) lim (D/Y)t = --r-

t +"'

The model indicates that, given the assumptions, consumers will not continuously borrow. There is a limit to the amount of debt typical consumers will incur. This limit is determined by the rate of growth of income and the proportion of current income which is associated with changing debt levels.

Equation 8 has several implications for the analysis of consumer installment credit. First, the model suggests, as noted above, there is a limit to credit growth relative to income. Consumers are not envisioned as continuously going into debt. Second , if for some reason there is a period of above normal debt growth, cons umers adjust subsequently by incurring debt at a somewhat lower rate of growth. Third, credit growth should be analyzed from a l ong-run perspective.

This growth model provides a useful framework for analyzing credit growth. Consumers are not necessarily becoming over extended whenever out­standings rise faster than income. Rapid increases in debt could reflect an adjustment on the part of consumers due to some structural change such as the end of the Second World War. But t he increases continue at a decreasing rate, or approach the ceiling asymptotically. Short­run cycles occur around the trend. The relevance of the model depends on how well the data support this perspective, and the next section provides this discussion.

Empirical Tests

To determine how well the model conforms to the post World War II experience, it is necessary to obtain estimates of a and r. Once this has been accomplished, then equation 8 becomes a strai ght­forward cal culation. Having the time period for the analysis beginning with 1945 has the advan­tage of the starting debt level, D0 , being relatively small . An estimate of r can be obtained through using the beginning and end of period values of Y in equation 2 and so lving for r. Given the estimated r, fitting a regression to equation 6 produces an estimated a.

Enthoven [3] obtained a limiting debt-to-income ratio for the 1945-56 period of .188. This was bas ed on a calculated r of .060 and an estimated a of .0107. Evans [4 ], in a subsequent appli­cat ion covering 1946-64, obtained a limiting debt-to-income ratio of . 178, based on a calcu­lated r of .0575 and estimated a of .0096. Both concluded that the asymptotic trend identified by the gr owth model had a real world counterpart .

Nearly twenty years have e lapsed since the Evans study, and this almost doubles the time period which can be used to test the model' s implica­tions. Consequently, an empirical analysis seems warranted, especial ly in light of recent concern about consumer debt levels, bankruptcy, and saving. Preliminary results are presented and interpreted be l ow . The time period is 1945-1983 . Two measures of annual income are used . One is personal income which i s the one used in the

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previous studies. The other is disposable income . It is a measure of spendable income and is a more relevant measure for purchase decisions. Outstandings are end of year values.

Tables 2 and 3 provide the relevant dat a . The first presents the calculations with respect to personal income, and the second pertains to dis­posable income. The calculated annual rates of growth of income are .0759 for personal income and .0749 for disposable income. Initial regres­sion results associated with equation 6 indicated very high degrees of auto-correlation, so the equat ions were re-estimated using weighted first differences. Estimated a values are .0105 for personal income and .0122 for disposable income.3 Given these sets of estimates, predicted levels of debt, income, and debt-to-income ratios were calculated. These are also displayed in the tables. Figures l and 2 present the actual and predicted ratios in graphical form.

Examination of the data leads to the conclusion that the credit growth predicted by the model has a real world counterpart. Notice the actual debt-to-income ratios for either personal or disposable income appear to be growing asymptot­ically. Short-run cycles in credit growth seem to fluctuate around a long-run trend which approaches an upper limit. Using equat ion 8, the limits are .149 for personal income and .175 for disposable income.4 These cal cul ations are con­sistent with observations made by Shepard that cred it expansion levell ed off in the mid-1960s and debt burdens levelled off since t he mid-1970s (15, 16].5

Inspection of the figures also point s t o a limi­tation of the mode l in its present form. In most years the actual ratios are greater than the predicted values. A least squares approximation of the actual ratios (as opposed to equation 6 divided by 2) would generate a higher asymptotic

3

4

5

Weights used in computing the differences were the estimated auto correlation efficients obtained from the initial regressions. These were .837 and . 841 for the personal and di s­posable income equations , respectively. The assumption of no autocorrelation i n the weighted first diffe rence equations was main­tained. The a coefficients reported here had prob-values considerab l y smaller t han . 01, and the R2 values were greater than .95.

Since personal income is income before taxes, it is expected that a should be higher when using disposable income.

Est imates of r and a are sensitive to the choice of the beginni ng and end years. The pos ition of the predicted curve could be raised somewhat by choosing an earlier year, especial l y 1979. However , this would not affect the basic analysis here of an asymp­totic long-run growth, and the latter 1970s would still be above the trend.

TABLE 2. Predicted and Actual Debt Using TABLE 3. Predicted and Actual Debt Using Dis-Personal Income posable Income

A A. A I\ 6): I\ I\ A Year PI PI D D D/PI D/pr Year DI D Di or D/ Dr

1945 171. 2 2.3 .014 1945 150 . 4 .016 1946 178.0 184.2 4.2 4.4 .023 .024 1946 160.6 161. 7 4.4 .026 .027 1947 189.8 198.1 7 .1 6.5 .037 .033 1947 168.4 173.8 6.5 . 042 .038 1948 208.5 213.1 9.5 8.7 .046 .041 1948 187 .4 186 . 8 8.8 .051 .047 1949 205.6 229.2 12.2 11.1 .059 .048 1949 187.1 200.8 11.3 .065 .056 1950 226.1 246.6 15.5 13 . 7 .069 .055 1950 205.5 215.8 13.9 .075 .064 1951 253.7 265.2 16.2 16 . 5 .064 .062 1951 224.8 232.0 16.7 .072 . 072 1952 270.4 285.3 20.5 19.5 .076 .068 1952 236.4 249 . 4 19.8 . 087 .079 1953 286.1 306.9 24.3 22.7 .085 .074 1953 250. 7 268 . 0 23.1 .097 .086 1954 288.2 330.2 24.9 26.2 .086 .079 1954 255.7 288.1 26.6 .097 .092 1955 308.8 355.2 30.3 29 . 9 .098 .084 1955 273 .4 309.7 30.4 .111 . 098 1956 330.9 382.0 33.2 33.9 .100 .089 1956 291.3 332.9 34.4 . 114 .103 1957 349.3 411.0 35.4 38.2 .101 .093 1957 306.7 357.8 38.8 .116 .108 1958 359.3 442.l 35.3 42 . 9 .098 .097 1958 317 .1 384.6 43.5 . 111 .113 1959 382.1 475.5 41.1 47.8 .108 .101 1959 336.1 413.4 48.6 .122 . 117 1960 399.7 511.5 45 .1 53 . 2 .113 . 104 1960 349.4 444.4 54 . 0 .129 .121 1961 417.8 550.3 46.0 59.0 .110 .107 1961 365.8 477. 7 59.8 . 126 .125 1962 443.6 591.9 51.0 65 . 2 . 115 .110 1962 386.8 513 .5 66.1 .132 .129 1963 466.2 636.7 57.8 71.9 .124 .113 1963 405.9 551. 9 72.8 .142 .132 1964 499 . 2 684.9 65.6 79.1 .131 . 11.5 1964 440.6 593.3 80.1 .149 . 135 1965 540.7 736.8 73.9 86 . 8 .137 .118 1965 475.8 637.7 87.9 .155 .138 1966 588.2 792.5 79.3 95 .1 .135 .120 1966 513.7 685.5 96.3 .154 .140 1967 630 . 0 852.5 83 . 1 104.1 . 132 .122 1967 547.9 736.8 105.3 .152 .143 1968 690.6 917.1 91. 7 113.7 . 133 .124 1968 593.4 792.0 114.9 .155 .145 1969 754. 7 986.5 101.2 124.1 .134 .126 1969 638.9 851.3 125 . 3 .158 .147 1970 811.l 1,061.2 105.5 135.2 .130 .127 1970 695.3 915.l 136.5 .152 .149 1971 868.4 1,141.5 118 . 3 147.2 .136 . 129 1971 751.8 983.6 148.6 .157 .151 1972 951.4 1,227.9 133 . 2 160.1 .140 .130 1972 810.3 1,057.0 161.5 .164 .153 1973 1,065.2 1,320.9 155 . 1 174.0 .146 .132 1973 914.5 1,136.5 175 . 4 .170 .154 1974 1,168.6 1,420.8 164.6 188.9 .141 .133 1974 998 . 3 1,221.6 190. 3 .165 .156 1975 1,265.0 1,528.4 172.0 204.9 .136 .134 1975 1,096.1 1,313.1 206.3 .157 .157 1976 1,391.2 1,644.l 193.5 222.2 .139 .135 1976 1,194.4 1,411.4 223.6 .162 .158 1977 1,540.4 1,768.6 230.6 240.8 . 150 .136 1977 1,314.0 1,517.l 242.1 .175 .160 1978 1,732.7 1,902.4 273.6 260 . 7 .158 .137 1978 1,474.0 1,630.8 262.0 .186 .161 1979 1,951.2 2,046.5 312.0 282.2 .160 . 138 1979 1,650.2 1,(52.9 283 . 5 . 189 . 162 1980 2,165.3 2,201.4 313.5 305.3 .145 .139 1980 1,828.9 1,884.2 306.5 .171 .163 1981 2,435 . 0 2,368.0 331. 7 330.2 . 136 .139 1981 2,047.6 2,025 . 3 331.2 . 162 .164 1982 2,578 . 6 2,547.3 355 .8 357 . 0 ·.138 . 140 1982 2,176.5 2,177 . 0 357 .8 .163 .164 1983 2,744 . 2 2,740.1 396.1 385.7 .144 . 141 1983 2,340.1 2,340.1 386.4 .169 .165

PI .. personal income (billions). DI a disposable per sonal income (billions).

I\ PI predicted personal income (billions). £t .. predicted disposable per sonal income

(billions). D .. outstanding installment debt (billions).

I\ . I\ . .

D = predicted debt outstanding . D = predicted outstanding installment debt

(billions). D/Dr debt t o dis posable income ratio •

D/PI = debt to personal income ratio. ..... I\ D/Dr = predicted debt to disposable income

/l /\ ratio.

D/PI .. predicted debt to personal income ratio. Source: U.S. Department of Commerce.

Survei of Current Business and U.S. Board of Source: U.S. Department of Commerce. Governors, Federal Reserve Bulletin, select ed

Survei of Current Business and U.S. Board of issues. Governors, Federal Reserve Bulletin, selected issues.

172

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'''° '"' I MS l trO l t1S l tM ltU , ... ' 4 •tt l

trMlcu4 lM Aelu.&1 D•c ~· .OllpoWl • lee- l.ltl••

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trend. In addition, the divergence seems to increase over the time period. Two considera­tions seem to be the major factors associated with the discrepancy.

One factor is the predicted income. During the 1960s and 1970s both measures of income actually grew at lower than average rates. Consequently, income levels predicted by equation 2 were greater than actual levels, and this causes higher actual debt-to-income ratios relative to the predicted ones.

The other factor is a result of the assumptions associated with the model. In particular, the derivation of equation 8 assumes the distribution of borrowers remains constant, but this may not have occurred. In fact, the changing age dis­tribution of the population most likely has raised the limiting debt-to-income ratio above the ones presented here. Suppose the proportion of consumers which borrows within a particular stage of the life-cycle does not change over

173

time . For example, if 30 percent of the con­sumers between 20 and 30 years old in 1950 used installment credit, the same percentage would apply to those in this stage in 1970. Suppose further, that across stages of the life-cycle there are differences in the proportions which borrow. Specifically, those in the earlier stages are more inclined to borrow. Then, changes in the age distribution of the population would result in changes in the limiting debt-to­income ratio.

The aging of the post World War II baby boom is consistent with an increasing debt-to-income ratio during the later year of the time period. Previous analyses of consumer credit users have documented the great er likelihood of younger consumers using installment credit . Data in Table 4 provide an indication of the impact this generation may have had. Notice that the age distribution of families in the primary borrowing age group increased significantly in 1970 and 1980 . This suggests that the changing age dis­tribution of the population, by itself, has had an effect not explicitly incorporated into the model. Part of the explanation of the rel atively high ratios which occurred in the 1970s, especi­ally towards the end of that decade, could reflect the emergence of the baby boom generation into that stage of the life-c.ycle which is most likely to use credit.

TABLE 4. Age Distribution of Heads of House­holds

Percent Distribution Age of Head 1980 1970 1960 1950

14-24 8.1 6.8 5.4 5.2 25-34 22.9 18.5 20.4 22. 7 35-44 17.3 18. 6 23.9 24.2 45-54 15.7 19.5 21.0 20.3 55 and over 36.0 36.6 29.3 27.7

Source: U.S . Bureau of the Census. Current Population Reports, Series P-20 and Historical Statistics of the United States: Colonial Times to 1970, Volume 1.

The growth model provides a convenient analytical perspective. Just focusing on this baby boom, the inference is that t he long-run trend shifts up somewhat. The new limiting ratio will still be approached asymptotically. An implication is that as the shift occurs, debt to income ratios would appear to be growing at a higher, but tem­porarily so, rate.

Conclusions

These results provide a useful perspective for evaluating the four concerns regarding consumer credit growth. Consumers, as a group, appear to be quite deterministic in their use of credit. Although levels of debt have been rising, con­sumers seem to be adjusting their debt to conform to long-run goals. This is especially true if

allowances are made for the actual r at e of income growth and changes in the age distribution of the population. In addition, periods of rel atively high credit growth are followed by periods of slower growth, providing an adjustment to the long-run. For example, the late 1970s was a period of high credit growth, and it has been followed by a period of lower growth [11, 13).

Another conclusion i s that consumers' use of credit i s not out of l ine with past experi ence and continued credit growth should be l ess pro­nounced as debt levels approach the ce ili ng . Consequently , consumer saving in the economy i s not out of line with past experience, and this is indicated by data on the savings rate. Prelim­inary savings rat es estimates of the late 1970s have been revised upwards, and current savings rates are compatible with historical norms.

The mode l and data continue to suggest that consumer credit does not cause fluctuations in economi c act ivity. This can be inferred from an examination of the recession years. They ar e circ l ed in the figures. I n the majority of these instances the actual ratios are above the long­run trends which suggests that credit during these periods actually contribut ed to aggregate demand.6 Fluctuations in credit growth do no t appear to be relat ed in a consistent manner with turning points i n business act ivity.

Consumer s over an extended period of time appear to have been quite cons i s tent in their use of credit. Actual debt-to- income ratios seem to be growing in a fash ion which i s approximated by a long-run asymptotic pattern . Rapid credi t expansion over a short period of time does not have to be a cause for al a rm. Changes i n i ncome growth and demographic composition can be sources of installment debt growth. As the postwar baby boom enters the life cyc l e stage in which borrow­ing is most likely to occur, it will l ead t o credit growth; and as th is segment of the popu­l ation enters subsequent stages, continued adjustment towards the long-run debt-to- income ratio should occur.

6

REFERENCES

[l] Curtin, Richard T. and Thomas S. Neubig. "Outstanding Debt Among American House­holds," Institute for Social Research, Survey Research Cent er , University of Michigan, WP4, April 1979.

[2] Eastwood, David B. "Consumer Credit and the Theory of Consumer Behavior," Journal of Behavioral Economics, 15(Summer 1975): 79-105.

[3] Enthoven, Alain. "The Growth of Consumer Credit and the Future of Pros perity," American Economi c Review, 47(1957):913- 929.

This observation is identical to that of Evans [3].

174

[4] Evans, Michael K. Macroeconomic Activity, (New York: Harper and Row, 1969).

[5] Fisher, Janet A. " Consumer Durable Goods Expenditures with Major Emphasis on the Role of Asset s , Credit, and Intentions, " Journal of the American Statistical Association, 58(1963) :648-57.

[6 ] Harris, M. and Karen Bradley. "Are House­holds Financially Overextended?" Federal Reserve Bank New York uarterl Review,

1977 :22-6 .

[7] Hunter, Hel en Manning. "A Behavioral Model of the Long-Run Growth of Aggregate Consumer Credit," Review of Economics and Statistics, 48(1960):124-40.

[8] Kisselgoff, Avram. Factors Affecting the Demand for Consumer Installment Sales Credit, (New York : National Bureau of Econ­omic Research, 1952).

[9] Lansing, John B., E. Scott Maynes, and Mordechai Kreinin. Consumer Installment Credit, (GPO, 1957), Part II, Vol. 1: 487-520.

[10] Lee, Maw Lin. "An Analysis of Installment Borrowing by Durabl e Goods Buyers," Econo­metrica , 30( 1962):770-87 .

[11] Luckett, C. "Recent Development s in the Mortgage and Consumer Credit Markets ," Federal Reserve Bulletin, (May, 1982): 281-90 .

[12] McCracken, Paul W., James C. T. Mao, and Cedric V. Fri cke. Consumer Installment Credit and Public Policy, (Ann Arbor:

[13]

University of Michigan, 1965).

Palash, C. J. "Household Debt Burden: How Heavy Is It?" Federal Reserve Bank of New York Quarterly Review, (summer, 1979): -9---1~2-.~~~~~~~

[14] Selden, Richard T. Trend s and Cyc l es in the Commercial Paper Market, (New York: National Bureau of Economic Research, 1963).

[ 15] Shepard, Lawrence . "Recent Changes in F:lnancial Markets Serving Consumers," Pro­ceedings 29th Annual Conference of the American Council on Consumer Interests, (March 16- 19, 1983).

[16] "Accounting for the Ris e in Consumer Bankruptcy Rates in the United States," Journal o f Consumer Affairs, 18(Winter, 1984):213-80.

[17] Tobin, James . "Consumer Debt Spending: Some Evidence from Analysis of a Survey, " Con­s umer Installment Credit, (GPO, 1957), Part II, Vol. 1 :521-44.