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Discussion Paper
Student Loan Balance and Repayment Trends Since the Pandemic Disruption
Mangrum, Daniel; Wang, Crystal (2025-03-26)
This month marks five years since the start of the COVID-19 pandemic, after which subsequent policy responses upended most trends underlying student loans in the U.S. Beginning in March 2020, executive and legislative actions suspended student loan payments and the accumulation of interest for loans owned by the federal government. In addition, federal actions marked all past due and defaulted federal student loans as current, driving the delinquency rate on student loans below 1 percent by November 2022. Payments on federal student loans resumed in October 2023 after forty-three months of ...
Liberty Street Economics , Paper 20250326a

Working Paper
Big Data versus a Survey
Whitaker, Stephan D. (2015-01-07)
Economists are shifting attention and resources from work on survey data to work on ?big data.? This analysis is an empirical exploration of the trade-offs this transition requires. Parallel models are estimated using the Federal Reserve Bank of New York Consumer Credit Panel/Equifax and the Survey of Consumer Finances. After adjustments to account for different variable definitions and sampled populations, it is possible to arrive at similar models of total household debt. However, the estimates are sensitive to the adjustments. Little similarity is observed in parallel models of nonmortgage ...
Working Papers (Old Series) , Paper 1440

Discussion Paper
How Severe Was the Credit Cycle in the New York-Northern New Jersey Region?
Abel, Jaison R.; Deitz, Richard (2013-01-16)
U.S. households accumulated record-high levels of debt in the 2000s, and then began a process of deleveraging following the Great Recession and financial crisis. In some parts of the country, the rise and fall in household indebtedness was quite a bit sharper than in others. In this post, we highlight some of our research examining the magnitude of the recent credit cycle, and focus on how significant it?s been in New York State and northern New Jersey. Compared with the nation as a whole, we find that the region experienced a relatively mild credit cycle, although pockets of elevated ...
Liberty Street Economics , Paper 20130116

Report
Financial Education and Household Financial Decisions During the Pandemic
Wang, Crystal; Mangrum, Daniel; Lee, Donghoon; Van der Klaauw, Wilbert (2024-10-01)
We examine the impact of financial education on credit decisions during COVID-19. The pandemic presented economic challenges, but policy responses provided opportunities for savvy borrowers. Using variation in state-mandated financial education during high school, we find that mandated borrowers reduced revolving credit card balances by larger amounts after stimulus checks were distributed and were more likely to buy homes and refinance mortgages during times of low interest rates. Paused student loan borrowers bound by mandates originated more auto loans and mortgages while reducing growth ...
Staff Reports , Paper 1131

Discussion Paper
Who Pays What First? Debt Prioritization during the COVID Pandemic
Plosser, Matthew; Conway, Jacob; Arnesen, William J. (2021-03-29)
Since the depths of the Great Recession, household debt has increased from a low of $11 trillion in 2013 to more than $14 trillion in 2020 (see the New York Fed Household Debt and Credit Report). In this post, we examine how consumers’ repayment priorities have evolved over that time. Specifically, we seek to answer the following question: When consumers repay some but not all of their loans, which types do they choose to keep paying and which do they fall behind on?
Liberty Street Economics , Paper 20210329

Working Paper
Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data
Kudlyak, Marianna; Mondragon, John; Coibion, Olivier; Gorodnichenko, Yuriy (2014-01-10)
One suggested hypothesis for the dramatic rise in household borrowing that preceded the financial crisis is that low-income households increased their demand for credit to finance higher consumption expenditures in order to "keep up" with higher-income households. Using household level data on debt accumulation during 2001-2012, we show that low-income households in high-inequality regions accumulated less debt relative to income than their counterparts in lower-inequality regions, which negates the hypothesis. We argue instead that these patterns are consistent with supply-side ...
Working Paper , Paper 14-1

Discussion Paper
Rising Household Debt: Increasing Demand or Increasing Supply?
Livingston, Max; Van der Klaauw, Wilbert; Zafar, Basit (2014-05-28)
Total consumer debt continued to increase in the first quarter of this year, marking the first time since the recession that aggregate debt had grown for three consecutive quarters, according to the May 2014 Quarterly Report on Household Debt and Credit. Is this increase in household debt driven by changes in supply or demand? The January 2014 and April 2014 Senior Loan Officer Opinion Surveys (SLOOS) show an increase in lenders? willingness to make consumer loans over the last several quarters and an increase in the number of lenders reporting looser lending standards, which indicates that ...
Liberty Street Economics , Paper 20140528

Working Paper
The Relationship between Debt and Output
Zhang, Jing; Kim, Yun Jung (2020-11-19)
In this paper we empirically explore the relationship between debt and output in a panel of 72 countries over the period 1970–2014 using a vector autoregression (VAR). We document two puzzling empirical findings that contrast with what is predicted by a standard small open economy model by Aguiar and Gopinath (2007), where debt and output endogenously respond to total factor productivity (TFP) shocks. First, developing countries’ debt falls after a positive output shock, while the model predicts a debt expansion. Second, output declines in developed and developing countries after a debt ...
Working Paper Series , Paper WP-2020-30

Working Paper
Stress Testing Household Debt
Bhutta, Neil; Dettling, Lisa J.; Laufer, Steven; Bricker, Jesse; Kelliher, Jimmy (2019-02-13)
We estimate a county-level model of household delinquency and use it to conduct "stress tests" of household debt. Applying house price and unemployment rate shocks from Comprehensive Capital Analysis Review (CCAR) stress tests, we find that forecasted delinquency rates for the recent stock of debt are moderately lower than for the stock of debt before the 2007-09 financial crisis, given the same set of shocks. This decline in expected delinquency rates under stress reflects an improvement in debt-to-income ratios and an increase in the share of debt held by borrowers with relatively high ...
Finance and Economics Discussion Series , Paper 2019-008

Discussion Paper
Credit Supply and the Housing Boom
Justiniano, Alejandro; Tambalotti, Andrea; Primiceri, Giorgio E. (2015-04-20)
There is no consensus among economists as to what drove the rise of U.S. house prices and household debt in the period leading up to the recent financial crisis. In this post, we argue that the fundamental factor behind that boom was an increase in the supply of mortgage credit, which was brought about by securitization and shadow banking, along with a surge in capital inflows from abroad. This argument is based on the interpretation of four macroeconomic developments between 2000 and 2006 provided by a general equilibrium model of housing and credit.
Liberty Street Economics , Paper 20150420

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