On Feb 7, 2011, at 11:03 AM, SA wrote:
> By the way, this note from the SF Fed presents a simple regression to explain the decline in the household saving rate since the early 80's. The two explanatory variables are household net worth and a measure of consumer credit availability (from a Fed loan officer survey). The two variables explain 90% of the variance.
Yes, that's a nice model, and I recently repurposed it myself. But what explains the increased willingness to lend? A surplus of cash helps.
Doug