Household Deleveraging and Saving Rates: A Cross-Country Analysis
IMF Working Papers, October 29, 2021
Source details
- Canonical URL
- Household Deleveraging and Saving Rates: A Cross-Country Analysis
Other formats
Bibliographic details
- Authors: Romain Bouis
- Published: October 29, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781589064072.001
Key findings
- Using a sample of advanced and emerging market economies, the paper finds evidence of a negative relationship between changes of household debt-to-income ratios and saving rates.
- The relationship is asymmetric: it is significant only for debt build-ups.
- Declining debt ratios and saving are significantly related in some economies, but this relationship is driven by consumer credit, not by mortgages.
- Results suggest that the economic cost associated with household deleveraging may be overestimated and motivate a deleveraging via lower mortgages.
Summary of research question and motivation
- Historically high household debt in several economies is calling for a deleveraging; some economists argue this adjustment can slow GDP growth by weighing on consumption.
- The paper investigates how changes in household debt-to-income ratios relate to saving rates across a cross-country sample.
Subjects and keywords
- Subject: Consumer credit, Consumption, Credit, Disposable income, Financial institutions, Money, Mortgages, National accounts
- Keywords: Africa, consumer credit, Consumption, consumption growth, Credit, deleveraging, Disposable income, homeownership rate, Household debt, housing equity withdrawal., mortgages, rates from credit boom, saving rate, saving rates
Content in this bundle
- Working Paper