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The Great American Debt Boom, 1949-2013

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The American economy experienced a dramatic increase in household debt since World War II. Relying on newly compiled archival micro data from historical waves of the Survey of Consumer Finances (SCF) going back to 1949, this paper makes the first systematic attempt to dissect the ascent of household debt in postwar America. We show that debt-to-income ratios have risen similarly across income groups and that debt growth since the 1970s occurred mainly on the intensive margin of housing debt. A quantitative assessment of household balance sheets demonstrates that financial vulnerabilities of different strata of the income distribution have risen substantially.

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  • Moritz Kuhn & Moritz Schularick & Ulrike I. Steins, 2017. "The Great American Debt Boom, 1949-2013," Community Development Publications and Reports, Federal Reserve Bank of St. Louis, pages 1-36, September.
    • Handle: RePEc:fip:l00101:103207
    Note: The St. Louis Fed Center for Household Financial Stability and the Private Debt Project hosted three "Tipping Points" Household Debt Research Symposia, 2016-2018. All three sessions were centered on the question of "tipping points" in regard to debt: How and when does household debt move from being wealth-building and productive for households and the economy to being wealth-depleting and destructive for both?; Conference Materials: https://fraser.stlouisfed.org/title/tipping-points-ii-mapping-understanding-impact-debt-economic-growth-9373/session-list-685749; Conference Executive Summary: https://fraser.stlouisfed.org/title/tipping-points-ii-mapping-understanding-impact-debt-economic-growth-9373/executive-summary-685748; Tipping Points Conference Series: https://fraser.stlouisfed.org/series/tipping-points-conference-series-9375
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    1. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
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