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Private debt in Sweden in 1900-2013 and the risk of financial crisis

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  • Lars Ahnland

Abstract

This study presents new time series data for private debt in Sweden in 1900-2013, including credit from banks, mortgage institutes and credit companies. The reconstruction of the data is a scientific task by itself, and is complicated by changed definitions, breaks in the series, and the need for occasional interpolation and cross-reference of sources. The obtained data reveal both qualitative and quantitative changes in the structure of private debt in Sweden during the period. One finding is a pattern where the era starting with the deregulation of the credit market in 1985 resembles the era preceding World War Two. Both periods experienced a high level of private debt-to-GDP ratio as well as severe financial crises. In a first application of the data, the hypothesis of rising private debt in the years before a financial crisis is explored through logit regression. The findings are in line with international research, and suggest that higher lending, especially from banks, might aggravate the risk of financial crisis.

Suggested Citation

  • Lars Ahnland, 2015. "Private debt in Sweden in 1900-2013 and the risk of financial crisis," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 63(3), pages 302-323, November.
    • Handle: RePEc:taf:sehrxx:v:63:y:2015:i:3:p:302-323
    DOI: 10.1080/03585522.2015.1084946
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
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    3. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    4. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    6. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Chapter 1," MPRA Paper 17452, University Library of Munich, Germany.
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    Cited by:

    1. Engelbert Stockhammer & Erik Bengtsson, 2020. "Financial effects in historic consumption and investment functions," International Review of Applied Economics, Taylor & Francis Journals, vol. 34(3), pages 304-326, May.

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