“TOO MUCH DEBT WILL KILL YOU”: ALTHOUGH NOT IN CENTRAL EUROPE, YET

• Authors: Belanová Katarína , Gertler Ľubomíra , Sivák Rudolf
• Languages of publication: EN

Abstracts

EN

We take an evidence-based approach and confirm that a high level of household debt is detrimental to consumption, disposable income, and hence economic growth in the medium term. Using a panel setting with both fixed and time effects, we isolate the effect of an excessive household debt level and show that an additional one percentage point could be associated with a 0.1% drag on GDP growth over the next three years. Although we confirm this relationship on a panel of advanced economies, we show that emerging economies such as Central and Eastern European economies possess structural characteristics (shallow capital market, less finance and more social cohesion) that so far prevent such a demand constraint from materializing.

Keywords

EN

WEALTH INEQUALITY; SECULAR STAGNATION; HOUSEHOLD DEBT; CENTRAL EUROPE; GDP

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2020
• Volume: 68
• Issue: 10
• Pages: 981 – 1001

Contributors

author

Belanová Katarína

• University of Economics in Bratislava, Faculty of National Economy, Dolnozemská cesta 1, 852 35 Bratislava 5, Slovak Republic

author

Gertler Ľubomíra

author

Sivák Rudolf

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2020.10.01