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dc.contributor.authorKlapper, Leoraen_UK
dc.contributor.authorLusardi, Annamariaen_UK
dc.contributor.authorPanos, Georgiosen_UK
dc.description.abstractThe ability of consumers to make informed financial decisions improves their ability to develop sound personal finance. This paper uses a panel dataset from Russia, an economy in which consumer loans grew at an astounding rate - from about US$10 billion in 2003 to over US$170 billion in 2008 - to examine the importance of financial literacy and its effects on behavior. The survey contains questions on financial literacy, consumer borrowing (formal and informal), saving and spending behavior. The paper studies both the financial consequences and the real consequences of financial illiteracy. Even though consumer borrowing increased very rapidly in Russia, the authors find that only 41% of respondents demonstrate understanding of the workings of interest compounding and only 46% can answer a simple question about inflation. Financial literacy is positively related to participation in financial markets and negatively related to the use of informal sources of borrowing. Moreover, individuals with higher financial literacy are significantly more likely to report having greater availability of unspent income and higher spending capacity. The relationship between financial literacy and availability of unspent income is higher during the financial crisis, suggesting that financial literacy may better equip individuals to deal with macroeconomic shocks.en_UK
dc.publisherThe National Bureau of Economic Researchen_UK
dc.relationKlapper L, Lusardi A & Panos G (2012) Financial Literacy and the Financial Crisis. NBER Working Paper, 17930.
dc.relation.ispartofseriesNBER Working Paper, 17930en_UK
dc.rights© 2012 by Leora F. Klapper, Annamaria Lusardi, and Georgios A. Panos. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.en_UK
dc.titleFinancial Literacy and the Financial Crisisen_UK
dc.typeWorking Paperen_UK
dc.type.statusVoR - Version of Recorden_UK
dc.subject.jelD14: Household Saving; Personal Financeen_UK
dc.contributor.affiliationThe World Banken_UK
dc.contributor.affiliationGeorge Washington Universityen_UK
rioxxterms.typeWorking paperen_UK
local.rioxx.authorKlapper, Leora|en_UK
local.rioxx.authorLusardi, Annamaria|en_UK
local.rioxx.authorPanos, Georgios|en_UK
local.rioxx.projectInternal Project|University of Stirling|
Appears in Collections:Economics Working Papers

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