The influence of the household balance sheet, the supply of credit, and uncertainty on consumer spending during the early years of the Great Depression in the USA are assessed within a unified life-cycle consumption function framework. Income uncertainty played the dominant role in the spending declines of 1930 and 1932. The depletion of households' financial assets contributed modestly to the consumption falls in 1931–1932. Indebtedness, the severe penalties surrounding installment debt default, and the supply of credit had little effect on the consumer spending slump.
Greasley, D. and Madsen, J.B. (2003), "The household balance sheet, credit, and uncertainty at the onset of the great depression in the USA", Research in Economic History (Research in Economic History, Vol. 21), Emerald Group Publishing Limited, Bingley, pp. 55-77. https://doi.org/10.1016/S0363-3268(03)21003-XDownload as .RIS
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