Author:
Siti Nurazira Mohd Daud ,Jan M Podivinsky ,Khairunnisa Abd Samad
Abstract
Average household debt has now surpassed the level of 2008, which signals an increase in systemic risk and thereby the fragility of the financial system. This paper investigates the effect of household debt on 24 countries’ economic growth. In addition, we also examine whether a tipping point of debt exists. By employing the threshold method, we found that the impact of household debt on a country’s economic growth is negative. Because the relationship between debt and growth is a monotonically non-increasing function, we do not find a magic threshold of debt.
Subject
Strategy and Management,Economics and Econometrics,Finance,Business and International Management
Reference39 articles.
1. Ando, A., & Modigliani, F. (1963). The "life cycle" hypothesis of saving: Aggregate implications and Tests. The American Economic Review, 53, 55-84.
2. Understanding the Macro-Financial Effects of Household Debt: A Global Perspective;Alter;IMF Working Paper WP/18/76,2018
3. The Role of Financial Development in Growth and Investment;Benhabib;Journal of Economic Growth,2000
4. Economic Growth, Convergence Clubs, and the Role of Financial Development;Berthelemy;Oxford Economic Papers,1996
5. Chen, S., & Kang, J. S. (2018). Credit Booms: Is China Different? IMF Working Paper WP/18/2.
Cited by
1 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献