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The Crisis Hits Home : Stress-Testing Households in Europe and Central Asia

Author

Listed:
  • Erwin R. Tiongson
  • Naotaka Sugawara
  • Victor Sulla
  • Ashley Taylor
  • Anna I. Gueorguieva
  • Victoria Levin
  • Kalanidhi Subbarao

Abstract

The Europe and Central Asia (ECA) region has been hit by a crisis on multiple fronts. Countries in ECA are facing major, interrelated, external macro-financial shocks. The first is the global growth slowdown leading to falling export market demand. In addition, the prospects for inflows of remittances to low-income countries have been downgraded as economic activity in migrant host countries has declined. The second is the financial deleveraging by major banks and other financial institutions in developed economies, which has markedly reduced the availability, and increased the cost, of external finance across public, corporate, and financial sectors. The third is the recent commodity price changes, which have involved a reversal of much of the commodity price boom of 2007 and 2008. The main objective of the study is to understand the impact of these macroeconomic shocks on household well-being. In particular, it seeks to understand the key macroeconomic shocks confronted by the region and the impact of such shocks on household welfare, including the effect on household income flows, consumption levels, and liabilities. It will also assess possible strategies to cope with the crisis and manage the adverse social impact.

Suggested Citation

  • Erwin R. Tiongson & Naotaka Sugawara & Victor Sulla & Ashley Taylor & Anna I. Gueorguieva & Victoria Levin & Kalanidhi Subbarao, 2010. "The Crisis Hits Home : Stress-Testing Households in Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 2396, December.
    • Handle: RePEc:wbk:wbpubs:2396
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    References listed on IDEAS

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    1. Harold Alderman & Christina H. Paxson, 1994. "Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries," International Economic Association Series, in: Edmar L. Bacha (ed.), Economics in a Changing World, chapter 3, pages 48-78, Palgrave Macmillan.
    2. Ms. Meral Karasulu, 2008. "Stress Testing Household Debt in Korea," IMF Working Papers 2008/255, International Monetary Fund.
    3. Erwin R. Tiongson & Naotaka Sugawara & Victor Sulla & Ashley Taylor & Anna I. Gueorguieva & Victoria Levin & Kalanidhi Subbarao, 2010. "The Crisis Hits Home : Stress-Testing Households in Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 2396, December.
    4. World Bank, 2009. "Armenia : Implications of the Global Economic Crisis for Poverty," World Bank Publications - Reports 3119, The World Bank Group.
    5. Sugawara, Naotaka & Sulla, Victor & Taylor, Ashley & Tiongson, Erwin R., 2010. "The Crisis Hits Home: Stress-Testing Households in Europe and Central Asia," World Bank - Economic Premise, The World Bank, issue 12, pages 1-4, May.
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    Cited by:

    1. Thorvardur Tjörvi Ólafsson & Karen Á. Vignisdóttir, 2012. "Households’ position in the financial crisis in Iceland. Analysis based on a nationwide household-level database," Economics wp59, Department of Economics, Central bank of Iceland.
    2. Piatkowski, Marcin & Zalduendo, Juan, 2010. "Assessing EU-10 Banking Sector's Resilience to Credit Losses," MPRA Paper 24631, University Library of Munich, Germany.
    3. Gan-Ochir Doojav & Ariun-Erdene Bayarjargal, 2017. "Stress testing the household sector in Mongolia," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(2), pages 23-52, December.
    4. Elif Karacimen, 2016. "Consumer Credit as an Aspect of Everyday Life of Workers in Developing Countries," Review of Radical Political Economics, Union for Radical Political Economics, vol. 48(2), pages 252-268, May.
    5. Otker-Robe, Inci & Podpiera, Anca Maria, 2013. "The social impact of financial crises: evidence from the global financial crisis," Policy Research Working Paper Series 6703, The World Bank.
    6. Erwin R. Tiongson & Naotaka Sugawara & Victor Sulla & Ashley Taylor & Anna I. Gueorguieva & Victoria Levin & Kalanidhi Subbarao, 2010. "The Crisis Hits Home : Stress-Testing Households in Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 2396, December.
    7. Dorothee Bohle, 2014. "Post-socialist housing meets transnational finance: Foreign banks, mortgage lending, and the privatization of welfare in Hungary and Estonia," Review of International Political Economy, Taylor & Francis Journals, vol. 21(4), pages 913-948, August.
    8. Aleksandra Riedl, 2021. "Are CESEE borrowers at risk? COVID-19 implications in a stress test analysis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/21, pages 37-53.
    9. Ajwad, Mohamed Ihsan & Haimovich, Francisco & Azam, Mehtabul, 2012. "Simulating the impact of the 2009 financial crisis on welfare in Latvia," Policy Research Working Paper Series 5960, The World Bank.
    10. Anna Shostya, 2019. "The Global Financial Crisis in Transition Economies: The Role of Initial Conditions," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(1), pages 37-51, March.
    11. Sugawara, Naotaka & Zalduendo, Juan, 2011. "Stress-testing croatian households with debt -- implications for financial stability," Policy Research Working Paper Series 5906, The World Bank.
    12. Pradeep Mitra & Marcelo Selowsky & Juan Zalduendo, 2010. "Turmoil at Twenty : Recession, Recovery, and Reform in Central and Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 2682, December.
    13. Ruch,Franz Ulrich, 2020. "Prospects, Risks, and Vulnerabilities in Emerging and Developing Economies : Lessons from the Past Decade," Policy Research Working Paper Series 9181, The World Bank.

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