scholarly journals The impact of welfare on household debt

2021 ◽  
Vol 41 (2) ◽  
pp. 154-176
Author(s):  
Martino Comelli
Keyword(s):  
Household Debt ◽  
The Impact

scholarly journals Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis

2020 ◽  
Vol 110 (9) ◽  
pp. 2667-2702 ◽  
Author(s):  
Emil Verner ◽  
Győző Gyöngyösi
Keyword(s):  
Foreign Currency ◽  
Debt Crisis ◽  
Spillover Effects ◽  
Household Debt ◽  
Sudden Increase ◽  
Real Economy ◽  
Balance Sheets ◽  
Default Rates ◽  
Foreign Currency Debt ◽  
The Impact

We examine the consequences of a sudden increase in household debt burdens by exploiting variation in exposure to household foreign currency debt during Hungary’s late-2008 currency crisis. The revaluation of debt burdens causes higher default rates and a collapse in spending. These responses lead to a worse local recession, driven by a decline in local demand, and negative spillover effects on nearby borrowers without foreign currency debt. The estimates translate into an output multiplier on higher debt service of 1.67. The impact of debt revaluation is particularly severe when foreign currency debt is concentrated on household, rather than firm, balance sheets. (JEL E21, E32, F34, G51)

scholarly journals Impact of the COVID-19 Pandemic on the Consumer Credit Market in V4 Countries

Risks ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 229
Author(s):  
Maria Czech ◽  
Blandyna Puszer
Keyword(s):  
Consumer Credit ◽  
Credit Market ◽  
Future Research ◽  
Household Debt ◽  
The Czech Republic ◽  
Regression Methods ◽  
Consumer Loans ◽  
Household Decisions ◽  
The Impact ◽  
Visegrad Group

The aim of this article is to analyse and assess the impact of the COVID-19 pandemic on the consumer credit market in the countries of the Visegrad Group (V4, i.e., the Czech Republic, Poland, Slovakia, and Hungary). There is no doubt that the pandemic has determined the amount of household debt due to consumer credit in the V4 group, and thus the question arises of how the pandemic affects the propensity of households to take out loans and the propensity to lend to them, and therefore whether it affects both the behaviour of borrowers and lenders. The study used the time series and multiple linear regression methods. The results of the study show that the Covid-19 pandemic has determined the level of household debt in the V4 group and is not indifferent to household decisions regarding taking out consumer loans. Although the research is preliminary, it has contributed to some extent to a better understanding of household indebtedness at a time of turbulence and instability resulting from health factors in V4 countries. In the future, this research will serve as the basis for future research on the phenomenon of household indebtedness in other countries.

The Association Between Household Debt and Marriage Satisfaction in the Context of Urban Household in Klang Valley Malaysia

2020 ◽  
Vol 8 (1) ◽  
pp. 12
Author(s):  
Cai Yunchao ◽  
Selamah Abdullah Yusof ◽  
Ruzita Bt Mohd Amin ◽  
Mohd Nahar Mohd Arshad
Keyword(s):  
Negative Relationship ◽  
Married Couples ◽  
Demographic Variables ◽  
Household Debt ◽  
Marriage Satisfaction ◽  
Urban Households ◽  
Financial Wellness ◽  
Significant Negative Relationship ◽  
Klang Valley ◽  
The Impact

By using the data collected from urban households in Klang Valley, Malaysia, this study tries to provide empirical evidence on the effect of household debt on married Malaysian couples on their marital satisfaction. This study wishes to extend the implications of household debt in Malaysia beyond economic concern per se. We found that household debt does have a negative association with marriage satisfaction for married couples in Klang Valley Malaysia. Such relationship is valid even financial wellness and other demographic variables are controlled. Moreover, the less secured personal debt shows a significant negative relationship with the couple’s marriage satisfaction compared with no evidence on the impact of housing loan and vehicle loan. 

How does household debt affect financial asset holdings? Evidence from euro area countries

2017 ◽  
Vol 34 (2) ◽  
pp. 194-212 ◽  
Author(s):  
Merike Kukk
Keyword(s):  
Selection Bias ◽  
Euro Area ◽  
Precautionary Savings ◽  
Household Debt ◽  
Financial Assets ◽  
Holistic View ◽  
Content Type ◽  
Aggregate Shocks ◽  
Household Level ◽  
The Impact

Purpose The paper aims to investigate the impact of financial liabilities on households’ holdings of financial assets. The debt-to-income ratio of the household sector increased from 75 per cent in 2000 to 99 per cent in 2010 in the euro area on average, and the rapid accumulation of household debt has induced the need to study how indebtedness affects the behaviour of households beyond their borrowing decisions. Design/methodology/approach The paper uses the first wave of the Household Finance and Consumption Survey from 2009-2010 covering euro area countries. The paper estimates a system of equations for households’ financial liabilities and assets, taking account of endogeneity and selection bias. Findings The results indicate that higher household liabilities are related to lower holdings of financial assets. The results are confirmed by a large number of robustness tests. The findings support the hypothesis that credit availability reduces precautionary savings as income shocks can be smoothed by borrowing, meaning fewer assets are held for self-insurance against consumption risk. Practical implications The results are obtained from a recession period when households faced aggregate shocks, whereas credit constraints were tighter than during good times. The implications of lower incentives to keep financial assets by indebted households is that they are actually more vulnerable to aggregate shocks, as they have fewer resources available when they are hit by a negative shock. Originality/value This is the first paper to investigate the effect of liabilities on financial assets using household level data. The paper takes a holistic view and models financial assets and liabilities jointly while controlling for endogeneity and selection bias.

scholarly journals Household Debt and Country Economic Growth: Does a Magic Threshold Exist?

2021 ◽  
Vol 22 (1) ◽  
pp. 161-174
Author(s):  
Siti Nurazira Mohd Daud ◽  
Jan M Podivinsky ◽  
Khairunnisa Abd Samad
Keyword(s):  
Economic Growth ◽  
Systemic Risk ◽  
Financial System ◽  
Tipping Point ◽  
Household Debt ◽  
Threshold Method ◽  
The Impact ◽  
The Relationship ◽  
Increasing Function

Average household debt has now surpassed the level of 2008, which signals an increase in systemic risk and thereby the fragility of the financial system. This paper investigates the effect of household debt on 24 countries’ economic growth. In addition, we also examine whether a tipping point of debt exists. By employing the threshold method, we found that the impact of household debt on a country’s economic growth is negative. Because the relationship between debt and growth is a monotonically non-increasing function, we do not find a magic threshold of debt.

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