Household balance sheets and economic crisis

Arbeitspapier

This paper studies the economic impact of the current global economic downturn on the household sector. Household budgets can be negatively affected by declines in nominal wages and increases in unemployment. We empirically test this effect for the small open emerging economy. As a result of a lack of individual data on household finances, micro data are simulated. Our analysis clearly shows that there is a significant additional decline in consumption related to an increase in household default rates and unemployment. We find that potential household insolvencies have important implications for the financial system as well as for the macroeconomy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IES Working Paper ; No. 20/2011

Classification and Topics

• Classification: Wirtschaft ; Financial Institutions and Services: Government Policy and Regulation ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Bankruptcy; Liquidation ; Corporate Finance and Governance: Government Policy and Regulation
• Subject: credit cycle ; households' distress ; insolvency ; household default ; aggregate consumption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jakubík, Petr
• Event: Veröffentlichung
• (who): Charles University in Prague, Institute of Economic Studies (IES)
• (where): Prague
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/83302
• Last update: 10.03.2025, 11:44 AM CET