CONSUMER DEBT STRESS, CHANGES IN HOUSEHOLD DEBT, AND THE GREAT RECESSION

2015 ◽  
Vol 54 (1) ◽  
pp. 201-214 ◽  
Author(s):  
Lucia F. Dunn ◽  
Ida A. Mirzaie
Keyword(s):  
Great Recession ◽  
Household Debt ◽  
Consumer Debt ◽  
The Great Recession ◽  
Stress Changes ◽  
Debt Stress

scholarly journals Debt Constraints and the Labor Wedge

2016 ◽  
Vol 106 (5) ◽  
pp. 548-553 ◽  
Author(s):  
Patrick Kehoe ◽  
Virgiliu Midrigan ◽  
Elena Pastorino
Keyword(s):  
Great Recession ◽  
Household Debt ◽  
Real Wages ◽  
The Great Recession ◽  
Labor Wedge ◽  
Highly Correlated ◽  
The U.S

Changes in household debt and employment across regions of the U.S. during the Great Recession are highly correlated: regions where the decrease in household debt was most pronounced were also regions where the decline in employment was most severe. We show that the drop in employment in the regions that have experienced the largest decrease in household debt is mostly accounted for by changes in the labor wedge (deviations from a static consumption-leisure choice) as opposed to changes in real wages. We argue that such a pattern is consistent with fluctuations in debt constrain01/2ts in a standard Bewley-Aiyagari model.

US household deleveraging following the Great Recession – a model-based estimate of equilibrium debt

2015 ◽  
Vol 15 (1) ◽  
Author(s):  
Bruno Albuquerque ◽  
Ursel Baumann ◽  
Georgi Krustev
Keyword(s):  
Great Recession ◽  
Balance Sheet ◽  
State Level ◽  
Household Debt ◽  
The Great Recession ◽  
Us Economy ◽  
Pooled Mean Group ◽  
Level Data ◽  
The Us ◽  
Income Ratio

AbstractThe balance sheet adjustment in the household sector was a prominent feature of the Great Recession that is widely believed to have held back the cyclical recovery of the US economy. A key question for the US outlook is therefore whether household deleveraging has ended or whether further adjustment is needed. The novelty of this paper is to estimate a time-varying equilibrium household debt-to-income ratio determined by economic fundamentals to examine this question. The paper uses state-level data for household debt from the FRBNY Consumer Credit Panel over the period 1999Q1–2012Q4 and employs the Pooled Mean Group (PMG) estimator developed by Pesaran, Shin, and Smith (1999), adjusted for cross-section dependence. The results support the view that, despite significant progress in household balance sheet repair, household deleveraging still had some way to go as of 2012Q4, as the actual debt-to-income-ratio continued to exceed its estimated equilibrium. The baseline conclusions are rather robust to a set of alternative specifications. Going forward, our model suggests that part of this debt gap could, however, be closed by improving economic conditions rather than only by further declines in actual debt. Nevertheless, the normalisation of the monetary policy stance may imply challenges for the deleveraging process by reducing the level of sustainable household debt.

scholarly journals Household Debt Accumulation and the Great Recession of the United States: A Comparative Perspective

2019 ◽  
Vol 52 (1) ◽  
pp. 26-49 ◽  
Author(s):  
Yun K. Kim
Keyword(s):  
United States ◽  
Great Recession ◽  
The United States ◽  
Jel Classification ◽  
Careful Examination ◽  
Household Debt ◽  
Mainstream Economics ◽  
The Great Recession ◽  
Debt Accumulation ◽  
Intellectual Challenge

The Great Recession has provided an important intellectual challenge to both post-Keynesian and mainstream economists. In this article we survey some post-Keynesian views on household debt accumulation and the Great Recession of the United States, as well as the Atif Mian and Amir Sufi’s studies, perhaps the most influential and empirically-oriented studies of mainstream economics. We identify and distinguish their policy perspectives, and highlight commonalities and differences between them. By examining both post-Keynesian and Mian and Sufi’s views together, this paper emphasizes that, although there are clear differences between them, a careful examination reveals valuable complementarity which yields a better understanding of household debt accumulation and the Great Recession of the United States. JEL classification: E21, E32, E52, E62

scholarly journals Household Debt and the Great Recession

Review ◽  
2017 ◽  
Vol 99 (2) ◽  
pp. 183-205 ◽  
Author(s):  
Carlos Garriga ◽  
◽  
Bryan Noeth ◽  
Don E. Schlagenhauf
Keyword(s):  
Great Recession ◽  
Household Debt ◽  
The Great Recession
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