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The Italian Crisis and Producer Households Debt: a Source of Stability? A Reproducible Research

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  • Stefano Olgiati
  • Gilberto Bronzini
  • Alessandro Danovi

Abstract

The European Credit Research Institute Research Report 2013 identifies Households debt "rapid increase and abrupt retrenchment" among the causes of macroeconomic instability in the European Union after 2008. In our research: i) we accessed the Bank of Italy Online Statistical Database on Customers and Risk for Producer Households and Non-Financial Corporations with R Sweave open access statistical software, which makes our analysis freely reproducible by other researchers; ii) we subset the European System of Accounts sector Households into the Bank of Italy sub-sectors Households and Producer Households, which are market producing entities limited to informal partnerships, de facto companies and sole proprietorships with up to five employees and iii) we tested the hypothesis of "rapid increase and abrupt retrenchment" of debt for this subset in Italy for the period 1996-2013. We found that PH debt (bad debt) has been more stable with a lower Variation Coefficient of 10.3% (14.2%) versus 13.2% (20.1%) in NFC. We also found that the time series of the ratio of debt granted to NFC (numerator) versus PH (denominator) is best described (Multiple Squared 0.95) by the concavity of the 5th degree coefficient (slope -1.22; 95% CI -1.52 - -0.91) of a 5th order polynomial linear regression and by the convexity of the 2nd degree coefficient (slope 4.26; 95% CI 2.53 - 5.99) for bad debt (Multiple R Squared 0.47), with this concavity of debt and convexity of bad debt beginning with the Italian crisis in the second trimester of 2008. We reject the hypothesis (p

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  • Stefano Olgiati & Gilberto Bronzini & Alessandro Danovi, 2014. "The Italian Crisis and Producer Households Debt: a Source of Stability? A Reproducible Research," Papers 1404.7377, arXiv.org.
    • Handle: RePEc:arx:papers:1404.7377
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    1. Tullio Jappelli & Franco Modigliani, 2006. "The Age–Saving Profile and the Life-Cycle Hypothesis," Chapters, in: Lawrence R. Klein (ed.), Long-run Growth and Short-run Stabilization, chapter 2, Edward Elgar Publishing.
    2. Chmelar, Ales, 2013. "Household Debt and the European Crisis," ECRI Papers 8239, Centre for European Policy Studies.
    3. Rossi, Nicola & Visco, Ignazio, 1995. "National saving and social security in Italy," Ricerche Economiche, Elsevier, vol. 49(4), pages 329-356, December.
    4. Chmelar, Ales, 2011. "Household Debt in Europe�s Periphery: The dangers of a prolonged recession," ECRI Papers 7478, Centre for European Policy Studies.
    5. Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(1), pages 113-137, January.
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