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Household Debt (household + debt)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

UK Household Debt: A Threat to Growth or Stability?

ECONOMIC OUTLOOK, Issue 1 2005
Article first published online: 2 FEB 200
The liberalisation of credit constraints in the 1970s for UK consumers has had important implications for the housing market and consumer spending. This paper by John Muellbauer1 examines the factors that have driven soaring consumer debt and house price levels; in particular those observed since the mid-1990s. By relying on recent econometric evidence and trends in credit availability, real income per head, nominal and real after tax mortgage rates, measures of perceived risk and broad demographic trends, it also analyses the prospects for house prices, mortgage debt and unsecured debt over the coming years. The outlook is for a ,soft landing' in the housing market and associated declines in the rate of growth of consumer debt, which, although probably not smooth, does suggest the underlying situation is more benign and less crisis-prone than it was in 1988,89. [source]

Household Debt and Income Inequality, 1963,2003

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 5 2008
MATTEO IACOVIELLO
income inequality; household debt; credit constraints; incomplete markets I construct an economy with heterogeneous agents that mimics the time-series behavior of the earnings distribution in the United States from 1963 to 2003. Agents face aggregate and idiosyncratic shocks and accumulate real and financial assets. I estimate the shocks that drive the model using data on income inequality, aggregate income, and measures of financial liberalization. I show how the model economy can replicate two empirical facts: the trend and cyclical behavior of household debt and the diverging patterns in consumption and wealth inequality over time. While business cycle fluctuations can account for the short-run changes in household debt, its prolonged rise of the 1980s and the 1990s can be quantitatively explained only by the concurrent increase in income inequality. [source]

Household Debt and Financial Constraints in Australia

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2005
Gianni La Cava
Over the past decade, household debt (as a share of household income) has reached historically high levels. This has raised concerns about whether, as a result of the rise in debt, households are now more financially ,fragile'. Using household survey data, a logit model is constructed to examine the relationship between the probability of being financially constrained and the economic and demographic characteristics of households in Australia. We find that the probability of a household being constrained is significantly affected by demographic and economic variables such as age, home ownership, weekly household income, and the share of income going to repayments on mortgage debt. Comparing survey results across time, it appears that the overall proportion of households that are financially constrained has fallen or, at worst, remained unchanged between 1994 and 2001. Much of the rise in debt appears to have been due to unconstrained households taking on more debt. As such, the rise in the aggregate debt to income ratio associated with owner-occupier mortgages appears to be the result of voluntary household choice and not to be associated with an increase in household financial distress. [source]