Credit Availability and Economic Decisions: Some Evidence from the Mortgage and Housing Markets

THE CONJECTURE that "credit rationing" plays an important role in decisions to purchase or consume recurs frequently in discussions of monetary policy, banking markets and consumption or investment decisions. Repetition of the phrase "cost and availability of credit" in official statements strengthens the impression that cost and "availability" have separable and independent effects on decisions to consume or invest. A large literature develops this theme