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Exploring Differences in Household Debt Across the United States and Euro Area Countries

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Abstract

Household debt has played a central role in the global financial crisis, yet our understanding of it remains limited. We put U.S. household leverage in an international perspective, using household-level data for the United States and ten euro area economies. U.S. households have the highest prevalence of collateralized and non-collateralized debt, hold comparatively large amounts, and face higher debt-service burdens despite having higher income. We find that the U.S. economic environment is more conducive to holding debt, primarily because a given level of collateral is associated with higher prevalence and larger amounts of collateralized debt in the United States.

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  • Dimitris Christelis & Michael Ehrmann & Dimitris Georgarakos, 2017. "Exploring Differences in Household Debt Across the United States and Euro Area Countries," CSEF Working Papers 465, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:465
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    More about this item

    Keywords

    household debt; debt burden; household finance; counterfactual decompositions.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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