Assessing and Predicting Financial Vulnerability of Italian Households: A Micro-Macro Approach
19 Pages Posted: 18 Sep 2016
Date Written: September 2016
This study develops a micro-founded model to analyse the economic-financial conditions of Italian households. Initially, an indicator is constructed for the base year 2014, which identifies vulnerable households based on the budget constraint and the composition of their financial portfolio. Subsequently, the impact of the predicted trends of macro-economic variables on the indicator is calculated in order to monitor its evolution in the short term (2015-2017). The empirical analysis is based on the Survey of Household Income and Wealth of the Bank of Italy and on the macroeconomic forecasts of Prometeia. The macroeconomic scenario for the period 2015-2017 implies a progressive reduction in the percentage of vulnerable households for the full extent of the projection.
Keywords: households’ financial vulnerability, micro-founded models, financial margin, debt
JEL Classification: D10, D14, G10
Suggested Citation: Suggested Citation