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Monetary Policy and Credit Card Spending
Author:
Mr. Francesco Grigoli
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and
Mr. Damiano Sandri
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 255
Language:
English
Publication Date:
16 Dec 2022
DOI:
https://doi.org/10.5089/9798400225475.001
ISBN:
9798400225475
ISSN:
1018-5941
Pages:
33
Keywords:
Credit card spending; heterogeneity; monetary policy; transmission; credit card data; IMF working paper research Department; interest rate cut; impact of monetary policy; interest rate rise; Consumer credit; Asset prices; Monetary tightening; Consumption; Negative interest rates
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We analyze the impact of monetary policy on consumer spending using credit card data. Because of their high frequency, these data improve identification and allow for a precise characterization of the transmission lags. We find that shocks to short-term interest rates affect spending much more rapidly than shocks to longer-term interest rates. We also detect significant asymmetries. While interest rate rises are contractionary, interest rate cuts are unable to lift spending. Finally, by exploiting the disaggregation of credit card data, we uncover considerable heterogeneity in the effects of monetary policy across spending categories and a stronger impact on higher-income users.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 255