'Til debt do us part

an empirical analysis on whether consumer sentiment influences the use of revolving credit in Australia

Con Korkofingas, Joseph Macri

Research output: Contribution to journalArticle

Abstract

The rising level of revolving credit (credit cards) in Australia over the past 25 years has generated enormous interest from policymakers, the media, consumer advocates and academics, particularly with the uncertainty regarding consumers' ability to meet their financial obligations due to the current financial upheaval. Revolving credit in Australia, like many other advanced countries, represents the most significant component of personal consumer debt, after home mortgages, and has risen quickly in recent years. The major objective of this paper is to examine whether the index of consumer sentiment and its changes, as measured by the Westpac-Melbourne Institute Survey of Consumer Sentiment has any predictive ability in explaining the aggregate use of revolving credit for Australia.
Original languageEnglish
Pages (from-to)64-71
Number of pages8
JournalEuropean Journal of Management
Volume9
Issue number3
Publication statusPublished - 2009

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Keywords

  • Granger Causality Tests
  • Consumer Sentiment
  • Consumer Debt
  • Revolving Credit

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