Impact of inflation on citizens borrowing

undergraduate thesis

• Author: Mara Filipović
• Mentor: Dajana Barbić (mentor)
• Granter: University of Zagreb; Faculty of Economics and Business; Zagreb
• Defense date and country: 2024-09-24, Croatia
• Scientific / art field, discipline and subdiscipline: SOCIAL SCIENCES; Economics

Abstract

Inflation, the persistent rise in the overall price level of goods and services, diminishes the purchasing power of money over time. In Croatia, inflation affects citizens' borrowing behavior through various channels. It reduces the real value of existing debts, benefiting borrowers with fixed-rate loans. However, inflation typically leads to higher nominal interest rates, increasing the cost of new borrowing. This can strain consumers' finances as they may need to borrow more to maintain their purchasing power amidst rising prices. Anticipated inflation may spur borrowing to capitalize on current lower costs. Lenders, wary of inflation's impact on loan repayments, may tighten lending criteria, complicating access to credit. Moreover, inflation discourages saving by eroding the value of savings, potentially prompting increased spending or investment in assets. Overall, inflation's influence on consumer borrowing in Croatia is intricate, impacting affordability, investment decisions, and financial stability.

• Keywords: inflation; borrowing; consumers; Croatia; debt; interest rates; purchasing power; impact; savings; investment
• Language: english
• URN:NBN: urn:nbn:hr:148:805133
• Study programme: Title: /; Study programme type: university; Study level: undergraduate; Academic / professional title: sveučilišni prvostupnik (baccalaureus) ekonomije/sveučilišna prvostupnica (baccalaurea) ekonomije (sveučilišni prvostupnik (baccalaureus) ekonomije/sveučilišna prvostupnica (baccalaurea) ekonomije)
• Type of resource: Text
• File origin: Born digital
• Access conditions: Open access
• Created on: 2024-09-25 17:07:09