Does Household Borrowing Reduce the Trade Balance? Evidence from Developing and Developed Countries

38 Pages Posted: 11 Jun 2021

See all articles by Can Xu

Can Xu

University of Groningen

Jan Jacobs

Institute of Tropical Medicine (ITM) - Department of Clinical Sciences; Nazi Boni University - Institut Supérieur des Sciences de la Santé

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: 2021

Abstract

We examine the dynamic impact of household borrowing on the trade balance using data from 33 developing countries and 36 developed countries over the 1980-2017 period. Our findings suggest that the impact of household borrowing on the trade balance is by and large negative, both in the short and long run. We show that household borrowing’s adverse effects on the trade balance are more pronounced but less persistent in developing countries.

JEL Classification: E210, F320, G210

Suggested Citation

XU, CAN and Jacobs, Jan and de Haan, Jakob and de Haan, Jakob, Does Household Borrowing Reduce the Trade Balance? Evidence from Developing and Developed Countries (2021). CESifo Working Paper No. 9123, Available at SSRN: https://ssrn.com/abstract=3863826

CAN XU (Contact Author)

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

Jan Jacobs

Institute of Tropical Medicine (ITM) - Department of Clinical Sciences

Belgium

Nazi Boni University - Institut Supérieur des Sciences de la Santé

Burkina Faso

Jakob De Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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