Income inequality and credit expansion in post-communist countries

Latinović, Milica; Milošević, Nela

doi:10.1080/14631377.2018.1443247

Cited by 9 publications

(3 citation statements)

References 27 publications

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“…Household debt rises when the income gap is widened. Moreover, the correlation between household debt and income inequality is strong [33][34][35][36][37][38][39][40][41]. Christen et al (2005) [15] put forward that income inequality in the US has greatly exacerbated the increase in household debt, which means that the widening income gap has led to the excessive use of debt by households with slow income growth to maintain their consumption level.…”

Section: The Impact Of Income Inequality On Household Debtmentioning

confidence: 99%

Income Inequality, Household Debt, and Consumption Growth in the United States

Ying-ai

Sun

et al. 2023

Sustainability

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In this paper, the SV-TVP-VAR model is used to study the relationships between income inequality, household debt, and consumption growth in the US. This is of great significance for studying whether household debt can become a “substitute” for income and whether it is possible to achieve sustainable growth in consumption under the background of worsening income inequality. According to the research results, the main conclusions are as follows: Firstly, the widening of income inequality would increase consumption in the short term but restrain consumption in the medium and long term, as the relationship between them would turn from positive to negative. Secondly, household debt could improve consumption in the short term but reduce consumption in the medium and long term, with long-term effects being greater than medium-term effects, which means that the long-term negative impact of US household debt on household consumption would be persistent. Lastly, widening income inequality has led to rising household debt over different maturities.

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Section: The Impact Of Income Inequality On Household Debtmentioning

confidence: 99%

Income Inequality, Household Debt, and Consumption Growth in the United States

Ying-ai

Sun

et al. 2023

Sustainability

View full text Add to dashboard Cite

show abstract

“…We find fourteen papers that explore the inequality-credit nexus on a cross-country level (Rubaszek and Serwa 2014; Klein 2015; Malinen 2016; Ahlquist and Ansell 2017; Moore and Stockhammer 2018; Stockhammer and Wildauer 2018; Fischer, Huerta, and Valenzuela 2019; Gu et al 2019; Latinovic and Milosevic 2019; Lim 2019; Chang et al 2020; Herradi and Leroy 2020; Bazillier, Héricourt, and Ligonnière 2021; De Vita and Luo 2021). Even if we apply the loose standard, we find only five papers that confirm the positive impact of income inequality on household debt (Klein 2015; Gu et al 2019; Chang et al 2020; Herradi and Leroy 2020; Bazillier, Héricourt, and Ligonnière 2021).…”

Section: Evidence On the Inequality-credit Nexusmentioning

confidence: 99%

“…Even if we apply the loose standard, we find only five papers that confirm the positive impact of income inequality on household debt (Klein 2015; Gu et al 2019; Chang et al 2020; Herradi and Leroy 2020; Bazillier, Héricourt, and Ligonnière 2021). Other studies either find a bidirectional causality between household debt and inequality (De Vita and Luo 2021), fail to find a robust relationship between inequality and household indebtedness (Rubaszek and Serwa 2014; Malinen 2016; Moore and Stockhammer 2018; Stockhammer and Wildauer 2018), or report that the relationship is condition dependent (Ahlquist and Ansell 2017; Fischer, Huerta, and Valenzuela 2019; Latinovic and Milosevic 2019; Lim 2019).…”

Section: Evidence On the Inequality-credit Nexusmentioning

confidence: 99%

Is Rajan’s Hypothesis Confirmed by Empirical Evidence? A Critical Review

2022

Review of Radical Political Economics

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Based on experience in the United States in recent decades, Rajan (2010) argues that there is an inequality-debt-crisis nexus, that is, income inequality may contribute to banking crises by stimulating the accumulation of household debt. Whether and to what extent Rajan’s hypothesis has been confirmed (or refuted) by the literature is investigated in this study. It is shown that the validity of Rajan’s theory depends on the level of strictness of the standards that are established to estimate the extent of agreement between theory and evidence. This conditional validity can be attributed to the multidimensional nature of the inequality-debt-crisis nexus, which is overlooked by Rajan. JEL Classification: D31, E51, G21, G51

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Disrupting the Stock Market: Stocks Gone Crypto

Latinović

2023

Digital Transformation of the Financial Industry

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Income inequality and credit expansion in post-communist countries

Cited by 9 publications

References 27 publications

Income Inequality, Household Debt, and Consumption Growth in the United States

Income Inequality, Household Debt, and Consumption Growth in the United States

Is Rajan’s Hypothesis Confirmed by Empirical Evidence? A Critical Review

Disrupting the Stock Market: Stocks Gone Crypto

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