I talk a lot about trust. As someone who’s studies behavior, I take a special interest in how trust can affect decision-making. This has come up in my posts about the use of cash, the use of credit, and the use of banking services. If people don’t trust banks, then our financial infrastructure has a… Continue reading Trust in Banks
Exploration of the liquid hand-to-mouth concept leads to another economic conundrum: the credit card debt puzzle. The puzzle refers to a situation in which a consumer simultaneously holds interest bearing credit cards debt and liquid assets. Economists have mused for years over why people engage in this obviously irrational behavior. Why not just use your… Continue reading The Credit Card Debt Puzzle: A Lesson in Cognitive Biases
Over the last couple of years, there’s been a lot of speculation that traditional economic models are failing to explain the post-Great Recession world. Some are aruing that we’re in “secular stagnation”. Some think that the Fed needs to pursue more radical policy to adjust for consistently sluggish growth and stagnant wages and prices. This could… Continue reading The Liquid Hand to Mouth – The New Normal?
You may not think much of the decision to use cash versus credit versus debit on a day-to-day basis, but there’s a lot going on behind that decision (and its implications for your bank account), even if you’re not consciously aware of it. I’ve been seeing lots of new data and studies regarding how different… Continue reading Mainstream Monday: Credit cards – are they working for you?
I rarely discuss macroeconomic issues on the blog, or in my day to day life. I find myself far more interested in how individual consumers and households make decisions than in how those decisions affect the big picture. To be honest, it kind of overwhelms me when I start thinking about all of the moving… Continue reading Inflation and Expectations: Reach for the Stars