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Los canales del desapalancamiento del sector privado: una comparación internacional

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  • Daniel Garrote

    (Banco de España)

  • Jimena Llopis

    (Banco de España)

  • Javier Vallés

    (Banco de España)

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    Abstract

    Following the increase in private-sector indebtedness before the 2008 Great Recession, balance sheet adjustment by the most indebted agents will be a necessary condition for achieving balanced growth. This paper analyses the deleveraging of the non-financial private sector in four countries that experienced a housing boom —US, UK, Ireland and Spain— and how it is affecting their pace of recovery. The results indicate that in 2008-2012 there are differences in these countries not only in the intensity of debt reduction but also in the distribution between agents and productive sectors, and in the form deleveraging is taking. Arguably, too, differences in observed patterns of adjustment are related to distinct economic policies and international environments. In the United States the drivers reducing debt are the improvement in activity and household debt restructuring and defaults; in the United Kingdom inflation has dominated, eroding the value of debt; and in Ireland and Spain the reduction in net financing flows is proving more important. Deleveraging processes will foreseeably continue in the future, as debt ratios are still relatively high. These processes are usually gradual in nature, so they will continue affecting consumption and investment growth over the coming years.

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/13/Fich/do1302.pdf
    File Function: First version, August 2013
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    Bibliographic Info

    Paper provided by Banco de Espa�a in its series Banco de Espa�a Occasional Papers with number 1302.

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    Length: 39 pages
    Date of creation: Aug 2013
    Date of revision:
    Handle: RePEc:bde:opaper:1302

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    Keywords: debt; deleveraging; inflation; restructurings; defaults;

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    1. Kamath, Kishore & Reinold, Kate & Nielsen, Mette & Radia, Amar, 2011. "The financial position of British households: evidence from the 2011 NMG Consulting survey," Bank of England Quarterly Bulletin, Bank of England, vol. 51(4), pages 305-318.
    2. Christopher Carroll & Jiri Slacalek & Martin Sommer, 2012. "Dissecting Saving Dynamics: Measuring Wealth, Precautionary, and Credit Effects," Economics Working Paper Archive 602, The Johns Hopkins University,Department of Economics.
    3. Neil Bhutta, 2012. "Mortgage debt and household deleveraging: accounting for the decline in mortgage debt using consumer credit record data," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2012-14, Board of Governors of the Federal Reserve System (U.S.).
    4. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(2), pages 211-48, April.
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
    6. Marco Terrones & M. Ayhan Kose & Stijn Claessens, 2008. "What Happens During Recessions, Crunches, and Busts?," IMF Working Papers 08/274, International Monetary Fund.
    7. Joe Peek & Eric S. Rosengren, 2005. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," American Economic Review, American Economic Association, vol. 95(4), pages 1144-1166, September.
    8. Garry Tang & Christian Upper, 2010. "Debt reduction after crises," BIS Quarterly Review, Bank for International Settlements, September.
    9. Stephen Cecchetti & Madhusudan Mohanty & Fabrizio Zampolli, 2011. "The real effects of debt," BIS Working Papers 352, Bank for International Settlements.
    10. Fabian Valencia & Luc Laeven, 2012. "Systemic Banking Crises Database: An Update," IMF Working Papers 12/163, International Monetary Fund.
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