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25. 2. 2015.
Consumption Response to Credit Tightening Policy: Evidence from Turkey
We study the impact of credit tightening policy implemented by the Turkish Banking Regulation and Supervision Agency on consumer spending in the period between January 2010 and August 2013. We find that consumers with high amounts of debt were severely affected compared to consumers with low debt. Following the implementation of the policy, relative spending of highly indebted consumers dropped by more than 70%, a significant and persistent drop for many months subsequent to the policy date. The policy effect was strongest for consumers that are young, single and have a low credit card limit.