The Rise in US Household Debt: Assessing its Causes and Sustainability

Barnes, Sebastian; Young, Garry

doi:10.2139/ssrn.597444

Cited by 36 publications

(28 citation statements)

References 22 publications

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“…Assumptions life cycle hypothesis in the context of debt have been repeatedly positively verified [Pearce, 1985;Livingstone, Lunt, 1992;Cox, Jappelli, 1993;Kempson, 2002;Barnes, Young, 2003;Mitrakos et al, 2005;Yilmazer, DeVaney, 2005;Faruqui, 2006;Beeri, Shürz, 2007;Betti et al, 2007;Zajączkowski, Żochowski, 2007;Carpentier, Van den Bosch, 2008;Wałęga, 2010;Keese, 2010;Lindquist et al, 2015].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Age on Polish Households Financial Behavior – Indebtedness and Over-Indebtedness

Anioła-Mikołajczak

2017

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SummaryThe aim of this paper is to examine how age of the head of household affects the financial behavior of households in terms of indebtedness and over-indebtedness. The over-indebtedness was analyzed from two aspects -margin and debt service ratio indicators. The data from Household Budget Survey in 2011 conducted by Central Statistical Office of Poland was used in the analyses. To achieve the main objective, selected measures of descriptive statistics and contingency tables were used. The research results confirm that in Poland credits were taken mainly by households of young people, which is consistent with assumptions of the life cycle hypothesis. Although these assumptions were not confirmed in the case of a problem with over-indebtedness.

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Section: Introductionmentioning

confidence: 99%

The Impact of Age on Polish Households Financial Behavior – Indebtedness and Over-Indebtedness

Anioła-Mikołajczak

2017

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“…La explicación para ello se encuentra en varias investigaciones (Barnes y Young, 2003;Weller, 2007), donde continúan siendo significativos los efectos sobre el crédito de las tasas de interés, las expectativas de crecimiento del ingreso (dada una falta de ingreso corriente) y los cambios demográficos.…”

Section: Revisión De La Literatura Sobre El Crédito Al Consumounclassified

“…Entre más elevadas sean las tasas de interés de los créditos de consumo, más grande será el sacrificio del ingreso futuro para alcanzar un mismo nivel de consumo presente financiado con deuda (Park, 1993). En consecuencia, cuando se observan niveles bajos en las tasas de interés, endeudarse se transforma en una opción más atractiva que antes (Barnes y Young, 2003;Tudela y Young, 2005;Morales y Yáñez, 2006).…”

Section: La Tasa De Interésunclassified

Crédito Al Consumo en Argentina Durante Periodos Normales Y De Crisis Económicas

Lacorte¹,

Watkins-Fassler²

2017

PE-IPN

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ResumenEsta investigación indaga sobre la relación entre factores macroeconómicos y la decisión de las familias para financiar su consumo con deuda. Particularmente, se estudia la correspondencia entre el ingreso, la tasa de interés, el desempleo y la confianza de los consumidores con el endeudamiento de las familias. Se verifica también si las relaciones entre las variables macroeconómicas (particularmente el ingreso) y la deuda para consumo son coherentes con las teorías que se han escrito sobre el consumo. Como estudio de caso se toma Argentina, pues permite el análisis bajo distintos escenarios normales y de crisis económicas (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011).Palabras clave: crédito al consumo, crisis económicas, Argentina Clasifi cación JEL: E21 AbstractThis paper deals with the relationship between macroeconomic factors and consumption debt. Specifically, it studies the association between income, interest rate, unemployment, and consumer confidence with consumption debt. The relationship between macroeconomic variables (in particular

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“…Lendol Calder (1999) claimed the "myth of lost economic virtue" associated with American consumer credit seriously misrepresented the integral role credit played in "financing the American dream". Many neoclassical analyses of consumer debt claim that it is essential to the fundamental workings of a market economy (Barnes and Young 2003), and that government intervention to protect consumers only inhibits access to financial resources that could lift households out of poverty (Murphy 1998). Instead, neoclassical theories believe governments should limit their intervention and use public policy to promote financial market access for all households (Boone and Girouard 2002).…”

Section: From Market Mechanism To Policy Process: Promoting Competitimentioning

confidence: 99%

“…(3) The Life-Cycle Permanent Income Hypothesis (LC-PIH) theory of household consumption assumes that increased debt to buy assets will increase wealth over time. This increase in wealth will, in turn, allow for increased consumption because income is not (and should not be) the main unit of consumption (Barnes and Young 2003).…”

Section: From Market Mechanism To Policy Process: Promoting Competitimentioning

confidence: 99%

Giving Credit where it's Due: Public Policy and Household Debt in the United States, the United Kingdom and Canada

Montgomerie¹

2006

Policy and Society

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The dominant account of rising household indebtedness in the United States, the United Kingdom and Canada claims that current economic stimuli, namely low nominal interest rates and rising property markets, are the key reasons debt has grown so rapidly since the mid-1990s. By drawing on key theoretical assumptions from neoclassical economics, policy makers have argued that rising debt levels since the mid-1990s shows that households are rational agents taking advantage of cheaper credit to purchase assets; thus, the equilibrating effect of market society translates into a balance between rising debt and rising assets. This article puts forward an alternative framework for evaluating potential contributing factors of rising household indebtedness in the United States, the United Kingdom and Canada by evaluating the long-term impacts of policies implemented to achieve non-inflationary growth. Using a neo-Gramscian method of analysing historical structures, it is argued that growing household indebtedness was not an inevitable outcome of the policy of non-inflationary growth. Instead, it was most likely a product of a confluence of forces as rising demand for credit by households (due to downward pressure on wages) combined with increased supply of credit (as banks sought profitable returns in a liberalised market) to generate indebtedness. By locating the specific policy processes that contributed to mass household indebtedness this article tries to more accurately understand the origins and effects of politically-led structural change.

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The Rise in US Household Debt: Assessing its Causes and Sustainability

Cited by 36 publications

References 22 publications

The Impact of Age on Polish Households Financial Behavior – Indebtedness and Over-Indebtedness

The Impact of Age on Polish Households Financial Behavior – Indebtedness and Over-Indebtedness

Crédito Al Consumo en Argentina Durante Periodos Normales Y De Crisis Económicas

Giving Credit where it's Due: Public Policy and Household Debt in the United States, the United Kingdom and Canada

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