Arbeitspapier
How to avoid household debt overhang? An analytical framework and analysis for India
In this paper we develop an analytical framework using the household utility maximization approach to model stability conditions to avoid household debt overhang. Our theoretical framework suggests that household debt stability is a function of five factors, namely the rate of interest, period of lending, income growth, loan-to-income ratio, and households' disutility from borrowing parameter. Further, we apply our analytical model to the case of India and estimate household debt stability conditions for Indian households under various scenarios to estimate the ceiling borrowing ratios borrowing below which households can avoid the risk of running into a debt overhang problem.
- Language
-
Englisch
- Bibliographic citation
-
Series: ADBI Working Paper Series ; No. 975
- Classification
-
Wirtschaft
Estimation: General
Statistical Simulation Methods: General
Existence and Stability Conditions of Equilibrium
Household Behavior: General
Fiscal Policies and Behavior of Economic Agents: Household
- Subject
-
debt overhang
household finance
household borrowing
- Event
-
Geistige Schöpfung
- (who)
-
Yoshino, Naoyuki
Gupta, Prachi
- Event
-
Veröffentlichung
- (who)
-
Asian Development Bank Institute (ADBI)
- (where)
-
Tokyo
- (when)
-
2019
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Yoshino, Naoyuki
- Gupta, Prachi
- Asian Development Bank Institute (ADBI)
Time of origin
- 2019
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