Economic policy makers, macroprudential supervisors or investors are interested in reli- able estimates of the equilibrium level of credit in the economy. While earlier theoretical and empirical studies concentrated mostly on the aggregate level of credit to the pri- vate sector or the value of corporate credit, more recent studies focus on the problem of credit to households. In this paper we contribute to this discussion by proposing a life-cycle model with individual income uncertainty that can be used to assess how various macroeconomic factors a®ect the equilibrium value of household credit
