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Did Import Competition Boost Household Debt Demand?




In the years preceding the Great Recession, the United States experienced a dramatic rise in household debt and an unprecedented increase in import competition. In a recent staff report, we outline a link between these two seemingly unrelated phenomena. We argue that the displacement of workers exposed to import competition fueled their demand for mortgage credit, which left many households more vulnerable to the eventual downturn in the housing market.

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  • Jean-Noël Barrot & Erik Loualiche & Matthew Plosser & Julien Sauvagnat, 2018. "Did Import Competition Boost Household Debt Demand?," Liberty Street Economics 20180117, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednls:87236

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    Cited by:

    1. Andrea Katona & Zoltán Birkner & Erzsébet Péter, 2023. "Examining Digital Transformation Trends in Austrian and Hungarian Companies," Sustainability, MDPI, vol. 15(15), pages 1-22, August.
    2. Ma, Song & Murfin, Justin & Pratt, Ryan, 2022. "Young firms, old capital," Journal of Financial Economics, Elsevier, vol. 146(1), pages 331-356.
    3. Lorenzo Bretscher, 2023. "From Local to Global: Offshoring and Asset Prices," Management Science, INFORMS, vol. 69(3), pages 1420-1448, March.
    4. Zhang, Yun & Liu, Yun & Zhang, Yifei & Chen, Xin, 2022. "Globalization blueprint and households’ fintech debt: Evidence from China’s One Belt One Road initiative," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 38-55.

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    trade; mortgages; household finances;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General

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