IDEAS home Printed from https://ideas.repec.org/a/wej/wldecn/413.html
   My bibliography  Save this article

Debt and Deleveraging

Author

Listed:
  • Susan Lund
  • Charles Roxburgh

Abstract

In this article, McKinsey Global Institute researchers assess the increases in debt and leverage in ten mature economies and four emerging economies – breaking down that data by each country’s financial, household, non-financial business and government sectors. The authors then analyse the sustainability of current levels of leverage in those sectors and construct a ‘heat map of deleveraging’. The map shows which sectors in which economies are most likely to deleverage. Third, the authors analyse 45 episodes of deleveraging since 1930, focusing on the 32 episodes that occurred after a financial crisis. From these episodes, the authors draw insights into the macroeconomic channels through which a country can deleverage. Finally, they discuss the policy and business implications of the findings.

Suggested Citation

  • Susan Lund & Charles Roxburgh, 2010. "Debt and Deleveraging," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 11(2), pages 1-30, April.
    • Handle: RePEc:wej:wldecn:413
    as

    Download full text from publisher

    File URL: http://www.world-economics-journal.com/Contents/ArticleOverview.aspx?ID=413
    Download Restriction: no

    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
    2. Stephen Cecchetti & Madhusudan Mohanty & Fabrizio Zampolli, 2011. "The real effects of debt," BIS Working Papers 352, Bank for International Settlements.
    3. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
    4. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "From Financial Crash to Debt Crisis," American Economic Review, American Economic Association, vol. 101(5), pages 1676-1706, August.
    6. Alberto Alesina & Dorian Carloni & Giampaolo Lecce, 2012. "The Electoral Consequences of Large Fiscal Adjustments," NBER Chapters,in: Fiscal Policy after the Financial Crisis, pages 531-570 National Bureau of Economic Research, Inc.
    7. Zsolt Darvas, 2011. "A tale of three countries: recovery after banking crises," Policy Contributions 663, Bruegel.
    8. Nielsen, Mette & Pezzini, Silvia & Reinold, Kate & Williams, Richard, 2010. "The financial position of British households: evidence from the 2010 NMG Consulting survey," Bank of England Quarterly Bulletin, Bank of England, vol. 50(4), pages 333-345.
    9. Song Han & Benjamin J. Keys & Geng Li, 2011. "Credit supply to personal bankruptcy filers: evidence from credit card mailings," Finance and Economics Discussion Series 2011-29, Board of Governors of the Federal Reserve System (U.S.).
    10. Neil Bhutta & Jane K. Dokko & Hui Shan, 2010. "The depth of negative equity and mortgage default decisions," Finance and Economics Discussion Series 2010-35, Board of Governors of the Federal Reserve System (U.S.).
    11. Jaakko Kiander & Pentti Vartia, 2011. "Lessons from the crisis in Finland and Sweden in the 1990s," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 38(1), pages 53-69, February.
    12. Valerie Cerra & Sweta C. Saxena, 2005. "Eurosclerosis or Financial Collapse: Why Did Swedish Incomes Fall Behind?," Macroeconomics 0508007, EconWPA.
    13. Lars Jonung, 2009. "The Swedish model for resolving the banking crisis of 1991 - 93. Seven reasons why it was successful," European Economy - Economic Papers 2008 - 2015 360, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wej:wldecn:413. 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: (Ed Jones). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.