Household Debt and the Macroeconomy
14 Pages Posted: 3 May 2012 Last revised: 26 Jun 2013
Date Written: March 1, 2004
Abstract
Lower interest rates and an easing of liquidity constraints have led to a substantial rise in household debt over the past two decades. The greater indebtedness has made the household sector more sensitive to changes in interest rates, income and asset prices. This enhanced sensitivity is higher where more households have variable instead of fixed rate mortgages.
JEL Classification: E210, E520
Suggested Citation: Suggested Citation
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