Exploring the Link between Household Debt and Income Inequality: An Asymmetric Approach

12 Pages Posted: 2 Jun 2016

See all articles by Apostolos Fasianos

Apostolos Fasianos

Brunel University London - Department of Economics and Finance

Hamid Raza

Aalborg University - Department of Business and Management

Stephen Kinsella

University of Limerick

Date Written: May 31, 2016

Abstract

We investigate the relationship between household debt and income inequality in the US, allowing for asymmetry, using data over the period 1913-2008. We find evidence of an asymmetric cointegration between household debt and inequality for different regimes. Our results indicate household debt only responds to positive changes in income inequality, while there is no evidence of falling inequality significantly affecting household debt. The presence of this asymmetry provides further empirical insights into the emerging literature on household debt and inequality.

Keywords: Household Debt, Income Inequality, Credit Asymmetry, Non-Linear ARDL

JEL Classification: C22, C51, C52, D31

Suggested Citation

Fasianos, Apostolos and Raza, Hamid and Kinsella, Stephen, Exploring the Link between Household Debt and Income Inequality: An Asymmetric Approach (May 31, 2016). Applied Economics Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2786891

Apostolos Fasianos

Brunel University London - Department of Economics and Finance ( email )

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

Hamid Raza

Aalborg University - Department of Business and Management ( email )

Aalborg, DK-9220
Denmark

Stephen Kinsella (Contact Author)

University of Limerick ( email )

Limerick
Ireland
+35361233611 (Phone)
+35361330316 (Fax)

HOME PAGE: http://stephenkinsella.net

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
172
Abstract Views
1,034
rank
238,452
PlumX Metrics