Professor Sumit Agarwal, the Foreign Core Scholar of the base, has published a collaborative paper titled "Liquidity Constraints, Consumption, and Debt Repayment: Evidence from Macroprudential Policy in Turkey" in the The Review of Financial Studies.

Abstract:

Using account-level credit card data from a large Turkish bank, we study the impact of a unique credit card policy that increases minimum payment on consumption and debt repayment. We show that the policy reduces credit card spending and debt, boosts existing debt repayment, and reduces credit card delinquency. The credit card debt of affected consumers falls on average by 50% two years into the policy’s implementation. An increase in minimum payment has a stronger effect than does a decrease of a similar magnitude. We build a benchmark life cycle model with soft liquidity constraint to explain the reduction in credit card spending.

Link： https://doi.org/10.1093/rfs/hhad024

Teacher profile

Sumit Agarwal, a Ph.D. in Economics from the University of Wisconsin, a professor in the Department of Finance at the National University of Singapore, and a Foreign Core Scholar of the Innovation and Talent Base for Digital Technology and Finance. Professor Sumit Agarwal has been the Dean of the Finance Department of the National University of Singapore Business School since 2018, as well as a professor of economics at the School of Arts and Social Sciences, a professor of real estate at the School of Design and Environment, and a Low Tuck Kwong Distinguished Professor. He is an editor and associate editor of journals such as Management Science, Real Estate Economics, Journal of Financial Services Research, and a reviewer of international authoritative journals such as AER/JPE/RES/JF/JFE/RFS/JFQA/MS/AEJ. He has received nearly 13 academic research awards, including the American Economic Review Outstanding Reviewer Award (2011, 2015-2017), the Finance Research Society Best Paper Award (2016), the American Retired Teachers Foundation Paul Samuelson Award (2011), the Wharton School of the University of Pennsylvania Family Investment Research Award (2009), and has been awarded the Distinguished Alumni Award of the University of Wisconsin (2017) and the Outstanding Research Fellowship of the National University of Singapore (2016). His main research areas include: financial institutions, household finance, behavioral economics, political economics, real estate, urban economics, etc. He has been invited by the International Monetary Fund, World Bank, Oxford University, University of Wisconsin, Georgetown University, New York University, Nanyang Technological University and other policy institutions, world-renowned institutions of higher learning, research institutions to give speeches or attend academic conferences. He has published more than 100 academic papers in international authoritative journals such as AER/JPE/RES/JF/JFE/RFS/Management Science, and co-authored monographs such as "Family Credit: Personal Debt and Mortgage Loans".