Household Indebtedness and Economic Growth (Empirical Analysis)
One important aspect of the resulting indebtedness in full-fledged market economies is the mutual influence between different economic sectors. Therefore, alongside the government indebtedness, one must take into account also the debts of private agents, especially of households and non-financial corporations. In this paper our effort is concentrated on the household sector, especially the impacts on economic growth. We have gathered data for the time period 1995-2010 for the sample of 17 European OECD countries. The main descriptive statistics reveal high and still increasing indebtedness (ratio on the net disposable income) especially in Denmark, The Netherlands, Norway and Sweden and still low indebtedness in postsocialist countries. In panel regressions (fixed effects) we add loans as another explanatory variable into growth equation and examine the impacts on the growth rate of real GDP. The main result shows that a 10 percentage point increase in the ratio of household loans to the net disposable income is associated with about 30 basis point reduction in lagged economic growth. More profound looks give the study of both cross-specific and period-specific coefficients. Last but not least we have examined more homogenous panel of 13 countries putting aside 4 postsocialist countries.
Volume (Year): 2012 (2012)
Issue (Month): 3 ()
|Contact details of provider:|| Postal: nam. W. Churchilla 4, 130 67 Praha 3|
Phone: (02) 24 09 51 11
Fax: (02) 24 22 06 57
Web page: http://www.vse.cz/
More information through EDIRC
|Order Information:|| Postal: European Financial and Accounting Journal, University of Economics, Prague, nám. W. Churchilla 4, 130 67 Prague 3, Czech Republic|
Web: http://www.vse.cz/efaj/ Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Xavier Sala-i-Martin, 1994.
"Cross-sectional regressions and the empirics of economic growth,"
Economics Working Papers
79, Department of Economics and Business, Universitat Pompeu Fabra.
- Sala-i-Martin, Xavier, 1994. "Cross-sectional regressions and the empirics of economic growth," European Economic Review, Elsevier, vol. 38(3-4), pages 739-747, April.
- Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 1994.
"The effects of monetary policy shocks: evidence from the Flow of Funds,"
Working Paper Series, Macroeconomic Issues
94-2, Federal Reserve Bank of Chicago.
- Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 1994. "The effects of monetary policy shocks: evidence from the flow of funds," Proceedings, Federal Reserve Bank of Dallas, issue Apr.
- Christiano, Lawrence J & Eichenbaum, Martin & Evans, Charles, 1996. "The Effects of Monetary Policy Shocks: Evidence from the Flow of Funds," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 16-34, February.
- Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
- Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
- Bas B. Bakker & Giovanni Dell'Ariccia & Luc Laeven & JÃ©rÃ´me Vandenbussche & Deniz Igan & Hui Tong, 2012. "Policies for Macrofinancial Stability: How to Deal with Credit Booms," IMF Staff Discussion Notes 12/06, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:prg:jnlefa:v:2012:y:2012:i:3:id:3:p:10-32. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frantisek Sokolovsky)
If references are entirely missing, you can add them using this form.