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The Rise of Household Debt in Global Economy and Türkiye

Author

Listed:
  • Murat BIRDAL

    (Department of Economics Istanbul University Fatih İstanbul Turkiye)

  • Serdar ACUN

    (Department of Banking and Finance Munzur University Aktuluk Tunceli Turkiye)

  • Parla ONUK

    (Department of Banking and Finance Nişantaşı University Şişli İstanbul Turkiye)

Abstract

This paper investigates the rise of household debt and its impact on class relations and the sustainability of capitalism. The analysis begins with a historical perspective on the factors contributing to household debt growth such as declining wages increasing pressure on organized labor and the need to maintain consumer demand in the face of declining profit margins. The paper then compares the dynamics of household debt across countries and examines Türkiye’s case in a global context. The findings suggest that unsustainable household debt levels declining wages and rising inequality; raise doubts about the long-term sustainability of capitalism as we know it. The paper advocates for rethinking economic policies and practices prioritizing the well-being and prosperity of the majority.

Suggested Citation

  • Murat BIRDAL & Serdar ACUN & Parla ONUK, 2023. "The Rise of Household Debt in Global Economy and Türkiye," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(73-2), pages 697-716, December.
    • Handle: RePEc:ist:journl:v:73:y:2023:i:2:p:697-716
    DOI: 10.26650/ISTJECON2023-1242692
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    References listed on IDEAS

    as
    1. Parsley, C J, 1980. "Labor Union Effects on Wage Gains: A Survey of Recent Literature," Journal of Economic Literature, American Economic Association, vol. 18(1), pages 1-31, March.
    2. Kamer Karakurum-Ozdemir & Melike Kokkizil & Gokce Uysal, 2019. "Financial Literacy in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 325-353, May.
    3. Robert J. Flanagan, 1976. "Wage Interdependence in Unionized Labor Markets," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(3), pages 635-682.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Household indebtedness inflation financialization JEL Classification: G51 E31 F34;

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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