Do we save for the bad times?

Borrowing on credit cards is expensive, yet people continue to accrue credit card debt. Michaela Pagel looks at evidence on credit card debt from a popular Icelandic financial aggregation app. Standard economic theory says that you will borrow more in bad times than in good, but her research shows that the opposite is true. This implies that periods of recession are deepened since people enter them already in debt and unwilling to increase borrowing and boost the economy.



Topics:  Financial markets

Tags:  credit card debt, household saving, Iceland

Associate Professor, Columbia Business School


  • 17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
  • 19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
  • 29 - 30 August 2019 / Galatina, Italy /
  • 4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
  • 9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey

CEPR Policy Research